U.S. Foodservice Sold for $7.1 Billion
AMSTERDAM -- Ahold, headquartered here, has agreed to sell its scandal-plagued American unit, U.S. Foodservice, to a consortium of private equity firms -- Clayton, Dubilier & Rice Fund VII LP (CD&R) and Kohlberg Kravis Roberts & Co. LP (KKR) -- for $ 7.1 billion, Progressive Grocer, sister company to Convenience Store News, reported.
The deal is expected to close in the second half of the year, subject to the fulfillment of customary conditions, including antitrust clearance and approval by parent company Ahold's shareholders.
The retail conglomerate's supervisory board and corporate executive board are recommending that shareholders approve the sale, which will be sought at an extraordinary general meeting scheduled for June 19. Shareholders will receive more detailed information on the transaction before the meeting.
"We have focused on restructuring U.S. Foodservice, strengthening its capabilities, and restoring profitability," said outgoing Ahold president and CEO Anders Moberg in a statement. "The agreement we have been able to reach with CD&R and KKR is the result of the hard work and dedication of everyone at U.S. Foodservice."
Columbia, Md.-based U.S. Foodservice, the second-largest broadline foodservice distributor in the U.S., supplies over 250,000 foodservice customers, including convenience stores, restaurants, hospitals, hotels, schools and the government. With 2006 revenues of over $19 billion, its operations cover a geographic area in which over 95 percent of the U.S. population lives.
"U.S. Foodservice has built one of the leading businesses in the foodservice distribution industry, with a wide range of growth and operational improvement opportunities," said KKR member Michael M. Calbert, who commended the company's management team for "doing an excellent job of refocusing the business in recent years."
"U.S. Foodservice is well positioned in a stable and growing industry that we know well from prior investments," added Richard J. Schnall, the partner heading the transaction from CD&R. "We plan to leverage the company's strong national and local market positions in the nearly $200 billion U.S.
foodservice industry to accelerate growth in both revenues and profitability."
A 2003 accounting scandal at the division rocked Ahold's financial stability, which it worked to regain through its "Road to Recovery" program and an exhaustive business review that led to the decision to sell the division, the report stated.
In other news, Ahold's outgoing CEO Anders Moberg said the company ought to diversify its product assortments beyond food.
"We need to extend our offer into non-food. We are starting to work on it," he stated in a Reuters report. "We will continue to work on that strategy."
The deal is expected to close in the second half of the year, subject to the fulfillment of customary conditions, including antitrust clearance and approval by parent company Ahold's shareholders.
The retail conglomerate's supervisory board and corporate executive board are recommending that shareholders approve the sale, which will be sought at an extraordinary general meeting scheduled for June 19. Shareholders will receive more detailed information on the transaction before the meeting.
"We have focused on restructuring U.S. Foodservice, strengthening its capabilities, and restoring profitability," said outgoing Ahold president and CEO Anders Moberg in a statement. "The agreement we have been able to reach with CD&R and KKR is the result of the hard work and dedication of everyone at U.S. Foodservice."
Columbia, Md.-based U.S. Foodservice, the second-largest broadline foodservice distributor in the U.S., supplies over 250,000 foodservice customers, including convenience stores, restaurants, hospitals, hotels, schools and the government. With 2006 revenues of over $19 billion, its operations cover a geographic area in which over 95 percent of the U.S. population lives.
"U.S. Foodservice has built one of the leading businesses in the foodservice distribution industry, with a wide range of growth and operational improvement opportunities," said KKR member Michael M. Calbert, who commended the company's management team for "doing an excellent job of refocusing the business in recent years."
"U.S. Foodservice is well positioned in a stable and growing industry that we know well from prior investments," added Richard J. Schnall, the partner heading the transaction from CD&R. "We plan to leverage the company's strong national and local market positions in the nearly $200 billion U.S.
foodservice industry to accelerate growth in both revenues and profitability."
A 2003 accounting scandal at the division rocked Ahold's financial stability, which it worked to regain through its "Road to Recovery" program and an exhaustive business review that led to the decision to sell the division, the report stated.
In other news, Ahold's outgoing CEO Anders Moberg said the company ought to diversify its product assortments beyond food.
"We need to extend our offer into non-food. We are starting to work on it," he stated in a Reuters report. "We will continue to work on that strategy."