US Foods signs $1.8bn deal to acquire SGA’s Food Group of Companies

US Foods Holding (USFD) has signed a definitive agreement to acquire five operating companies, known collectively as the Services Group of America’s (SGA) Food Group of Companies, as part of a deal valued at $1.8bn.

SGA’s Food Group of Companies operates as five separate entities, namely Food Services of America (FSA), Systems Services of America (SSA), Amerifresh, Ameristar Meats and GAMPAC Express.

US Foods will use a $1.5bn loan provided by JP Morgan and Bank of America Merrill Lynch to finance the acquisition.

The company is also expected to fund the balance of the purchase price through its existing liquidity resources.

US Foods chairman and CEO Pietro Satriano said: “This acquisition will significantly increase US Foods’ reach across key markets in the attractive and growing Northwest region of the US and adds one of the most well-regarded regional distributors to our company.

“With a shared commitment to customer service, including a proven track record of leveraging technology and private brands to meet customer needs, SGA’s Food Group of Companies is an ideal fit.”

SGA’s Food Group of Companies has a workforce of approximately 3,400 employees and achieved registered net sales of $3.2bn last year.

SGA executive vice-president and COO Slade Stewart said: “For the past 46 years, we have had the vision to become a leading national foodservice company.

“This is an exciting milestone in our journey and provides more success and growth opportunities for our customers and our associates.”

SGA’s Food Group of Companies currently operates 12 distribution centres and more than 20 private brands.

The acquisition is anticipated to further expand US Foods’ network.

The completion of the deal is subject to regulatory approval and other customary closing conditions.

SGA’s staff members will become part of the USFD team upon completion of the acquisition.