Performance Food to acquire wholesale distributor Core-Mark for $2.5bn

Performance Food Group (PFG), a Virginia-based foodservice distribution company, has agreed to acquire Core-Mark in a stock cum cash deal worth around $2.5 billion, which is inclusive of the latter’s net debt.

Core-Mark is a Texas-based wholesale distributor that caters to the convenience retail industry in North America with net sales of nearly $17 billion.

The company employs around 7,500 people and has 32 distribution centers across the US and Canada.

Core-Mark serves nearly 40,000 customer locations in all the 50 US states along with five Canadian provinces and a couple of Canadian territories.

Performance Food Group said that the deal will establish a best-in-class convenience business within its Vistar segment that will include the Eby-Brown and Core-Mark businesses.

The foodservice distribution company said that the expanded convenience business will operate under the Core-Mark brand and will be based in Westlake, Texas.

Eby-Brown, which is a tobacco, candy, and convenience distributor, will continue to maintain its operations in Naperville, Illinois.

Following the closing of the deal, Scott McPherson will continue as president and CEO of Core-Mark.

Performance Food Group to acquire wholesale distributor Core-Mark. Photo courtesy of Tumisu from Pixabay.

Comments on Performance Food acquisition of Core-Mark

George Holm – Performance Food Group Chairman, President, and CEO, commenting on Performance Food acquisition of Core-Mark, said: “Core-Mark is an outstanding company that we believe will significantly strengthen our business diversification and expansion into the convenience store channel. Core-Mark brings a highly skilled and experienced workforce along with an experienced senior leadership team, which will be valuable additions to the PFG family of companies.

“This transaction will also combine Core-Mark’s footprint and operational excellence with PFG’s existing capabilities in both convenience and foodservice. The deal comes with strong strategic and financial merits which we believe will generate significant customer benefits and help PFG continue to create long term shareholder value.”

As per the terms of the deal, Core-Mark shareholders will be offered $23.875 per share in cash plus 0.44 of Performance Food Group shares as consideration. In the enlarged company, Core-Mark’s shareholders will own a stake of around 13%.

Commenting on Performance Food acquisition of Core-Mark, Scott McPherson said: “As part of our continuous focus to maximize shareholder value and better serve our customers, our Board evaluated the transaction and determined this combination provides our investors immediate value and the opportunity to participate in the upside potential of being part of a larger, diversified and customer-centric supplier in the foodservice and convenience retail industry.

“The combination of our two highly complementary businesses creates an even stronger platform to drive growth, as we deliver a best-in-class offering to our customers.”

The deal, which is subject to US federal antitrust clearance, Core-Mark’s shareholder approval, and other customary closing conditions, is expected to be wrapped up in the first half of calendar 2022.