Sysco, the world's largest food distributor, has purchased UK-based Brakes Group in a deal worth £2.2 billion.
The US-based Sysco Corporation said the purchase is part of a strategic move to get a better footing in the European market. The deal is subject to customary regulatory review by European Union competition authorities, but is expected to complete before the end of Sysco's fiscal year in July.
Foodservice supplier Brakes Group – which has operations in the UK, Ireland, France, Sweden, Spain, Belgium and Luxembourg – has been owned by Bain Capital Private Equity since 2007. The purchase figure includes repayment of approximately £1.6 billion of Brakes Group's financial debt.
Dwight Poler, managing director of Bain Capital Private Equity, added, however, that since it took on the business it has invested over £100m in developing an e-commerce platform, multi-temperature distribution infrastructure, and customer service enhancements.
Brakes Group will operate as a standalone company within Sysco, and will continue to be led by chief executive officer Ken McMeikan. The management team and the rest of the employee base will remain in place.
Bill DeLaney, Sysco chief executive officer, said: 'This transaction will unite Sysco with a leading foodservice distributor in Europe with demonstrated capability to sustainably grow its business over time. We expect to retain key members of Brakes Group's talented leadership team and to experience little distraction from integration given the minimal overlap of the businesses.'
McMeikan said: 'It’s very exciting for Brakes Group to be joining the recognized worldwide leader in foodservice distribution. Last year we said we would look for the best strategic option for Brakes Group’s next stage of development. We are delighted to have now concluded this process by joining Sysco. Our mission is simple: to help businesses who serve food to thrive, and becoming part of the Sysco family will help us get closer toward achieving that great outcome for our customers, colleagues and suppliers.
'Similar to Sysco’s approach, Brakes Group serves thousands of customers across Europe every day, including pubs, restaurants, hotels, hospitals, schools, contract caterers and more. We have continued to flourish in recent years, and the significant investment that has been made in Brakes Group provides us with a very solid platform for further growth as part of Sysco.”
Brakes Group achieved revenues of nearly £3.3 billion in 2015, a 6.5% increase from the previous fiscal year.