Performance Food to acquire Core-Mark
In a move that brings together two rival distributing giants, Performance Food Group Company is to acquire Core-Mark in a stock and cash transaction valued at $2.5 billion.
Under the terms of the transaction, which has been unanimously approved by the Board of Directors of each company, Core-Mark shareholders will receive $23.875 per share in cash and 0.44 PFG shares for each Core-Mark share. Core-Mark shareholders will own approximately 13% of the combined company.
"The transaction will create a best-in-class convenience business," the companies said in a release. "The expanded convenience business will operate under the Core-Mark brand and will be headquartered in Westlake, Texas with Eby-Brown maintaining ongoing operations in Naperville, Illinois."
Scott McPherson is to continue as president and CEO of Core-Mark and Tom Wake will continue as president and CEO of Eby-Brown, reporting to McPherson.
“Core-Mark is an outstanding company that we believe will significantly strengthen our business diversification and expansion into the convenience store channel," said George Holm, PFG chairman, president and CEO. "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. The two organizations have similar cultures, which we expect will facilitate a smooth integration and transition process. We look forward to getting to know the associates at Core-Mark better and building a strong future as one organization.”
Patrick Hagerty, EVP of PFG and CEO of Vistar, said: “Adding convenience store distribution in 2019 built up the core strength of our organization, providing another important avenue for growth. Bringing Core-Mark to PFG will continue this journey and complement our existing portfolio. I look forward to us bringing together the best talent in convenience and welcoming Core-Mark associates at close.”
Core-Mark, one of the largest wholesale distributors to the convenience retail industry in North America, has approximately 7,500 employees and operates 32 distribution centre across Canada and the U.S. Core-Mark services approximately 40,000 customer locations in all 50 states, five Canadian provinces and two territories.
McPherson said there was "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 transaction builds upon PFG’s current foodservice focus within the convenience channel, adding additional customers and product offerings, particularly in the fresh food space.