Performance Food Group (PFG) has announced a definitive agreement to acquire Cheney Brothers, Inc. (“Cheney Brothers”), a prominent independent broadline foodservice distributor headquartered in Riviera Beach, Florida. Cheney Brothers, which is owned by the Cheney family and Clayton Dubilier & Rice (“CD&R”), will be acquired by PFG for $2.1 billion in cash. This acquisition is set to bolster PFG’s presence in the Southeast and enhance its distribution capacity. Cheney Brothers currently generates approximately $3.2 billion in annual revenue.
George Holm, PFG Chairman & CEO, expressed enthusiasm about the acquisition: “Cheney Brothers will be a valuable addition to our Foodservice segment, and we look forward to integrating their talented team into the PFG family. This acquisition will broaden and enrich our offerings to a diverse and high-quality customer base. We have long admired Cheney Brothers’ success in the Southeastern U.S., and we believe that combining our strengths will drive significant growth. We are excited about the future opportunities this partnership will bring.”
Byron Russell, CEO of Cheney Brothers, also shared his excitement: “On behalf of our 3,600 associates, I am thrilled about joining the PFG organization. I have watched PFG grow into one of the nation’s largest foodservice distributors, and I believe this transaction will create a powerful platform for further growth. Together, we will build on our respective strengths and achieve remarkable success.”
Strategic and Financial Benefits
- Expanded Geographic Reach: The acquisition will enhance PFG’s distribution network with five additional state-of-the-art facilities across four Southeastern states, increasing capacity for future growth.
- Complementary Operating Models: Both companies share customer-focused approaches, serving a diverse range of clients including independent restaurants, chains, hotels, country clubs, and institutional groups.
- Private Brand Potential: Cheney Brothers has a significant customer base in independent restaurants but low private brand penetration. PFG sees a substantial opportunity to introduce its private brands to these customers.
- Synergy Opportunities: PFG anticipates achieving around $50 million in annual run-rate synergies by the third fiscal year post-closing, primarily from procurement, operations, and logistics improvements.
- Financial Impact: The transaction is expected to boost PFG’s top-line revenue growth and adjusted EBITDA margins. It is also anticipated to be accretive to Adjusted Diluted EPS by the end of the first fiscal year, including synergies.
- Valuation: The purchase price represents a multiple of 13.0x Cheney Brothers’ unaudited Trailing 12-month Adjusted EBITDA. With the anticipated $50 million in run-rate synergies, the multiple is effectively 9.9x.
Transaction Financing and Approvals
The $2.1 billion acquisition will be financed through borrowing on PFG’s ABL facility and new Senior Unsecured Notes. The deal, approved by PFG’s Board of Directors, is subject to U.S. federal antitrust clearance and other standard closing conditions, with an expected completion in calendar year 2025. Shareholder approval from PFG is not required.
