US Foods Acquires Smart Foodservice Warehouse Stores
US Foods Holding Corp. has successfully completed a $970 million all-cash acquisition of Smart Foodservice Warehouse Stores. The deal excludes the Smart & Final retail grocery business, which was previously separated from Smart Foodservice.
Based in the greater Portland, Ore., area, Smart Foodservice consists of 70 small-format cash-and-carry stores across California, Washington, Oregon, Idaho, Nevada, Utah and Montana that serve small and midsize restaurants and other food business customers with a wide assortment of products. Smart Foodservice will operate as a separate operating unit within US Foods, with minimal integration required.
“We are pleased to welcome Smart Foodservice to the US Foods family,” said Pietro Satriano, chairman and CEO of Rosemont, Ill.-based US Foods. “With our shared commitment to supporting restaurant operators and providing best-in-class customer service, Smart Foodservice will complement our Chef’store cash-and-carry model and provide a platform to enhance our presence in this attractive channel.”
US Foods funded the purchase price for the acquisition with cash on hand and the proceeds from a $700 million term loan. The company expects to achieve about $20 million in annual run-rate cost synergies by the end of 2023, mainly through purchasing efficiencies and expansion of private-brand products.
With 28,000 associates and more than 70 locations, US Foods partners with about 300,000 restaurants and foodservice operators. During the coronavirus pandemic, the company has formed about 20 retail distribution partnerships with national grocery store chains, wholesale grocers and consumer packaged goods brands, temporarily reassigning more than 700 US Foods distribution associates to warehouse roles, as well as selling product to retailers across the country.