Performance Food Group Assumes Ownership of Core-Mark
The deal expands the company's geographic reach and market diversification into the growing convenience channel.
RICHMOND, Va. — Within four short months of announcing its intent to purchase Core-Mark Holding Co. Inc., the Performance Food Group Co. (PFG) is marking it a done deal.
The transaction creates a best-in-class convenience business within PFG's Vistar segment that includes the Core-Mark and Eby-Brown businesses. The expanded convenience business will continue to operate under Core-Mark and will be headquartered in Westlake, Texas, with Eby maintaining ongoing operations in Naperville, Ill.
PFG acquired Eby-Brown Co. LLC in 2019, as Convenience Store News previously reported.
Core-Mark President and CEO Scott McPherson will retain his role, as well as Eby-Brown President and CEO Tom Wake. Wake will report to McPherson.
"We are very pleased to close this acquisition and welcome Core-Mark's many talented associates to PFG," said George Holm, PFG chairman, president and CEO. "Core-Mark has proven itself to be a leader in convenience distribution and we are thrilled to add their leadership strength to the strong senior talent already driving PFG's success in the foodservice and convenience distribution industries.
"We are excited to begin the integration process and start to service Core-Mark's customers with the combined suite of brands," he continued. "By adding PFG’s food and foodservice capabilities to Core-Mark's solid platform, we expect to quickly begin to unlock the transaction value."
The addition of Core-Mark brings one of the largest wholesale distributors to the convenience retail industry in North America into PFG's family of companies, with approximately $17 billion in net sales. The company has approximately 8,000 employees and operates 32 distribution centers across the United States and Canada. Core-Mark services approximately 41,000 customer locations in all 50 U.S. states and five Canadian provinces.
Strategic and financial benefits of the tie-up include:
Accelerates PFG's diversification and adds highly complementary assets in the convenience store channel: Expands PFG's geographic reach and market diversification into the growing convenience store channel.
Adds complementary customer-centric operating model: Core-Mark brings a consistent go-to-market approach with a selling culture focused on customer success.
Enhances attractive customer base and product offerings: 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.
Strong strategic and financial merits: The transaction is expected to be accretive to Adjusted Diluted EPS in the first full fiscal year following the close. The accretion calculation does not include any of the expected cost synergies.
Annual run-rate net cost synergies of approximately $40 million expected to be achieved by the third full year after closing.
PFG also appointed Laura Flanagan to serve as an independent director on its Board of Directors. Flanagan has served as a director of Core-Mark since June 2016. This appointment expands PFG's Board to 12 directors.
Based in Richmond, PFG has a nationwide network of more than 100 distribution facilities. It markets and delivers food and related products to 200,000-plus locations including independent and chain restaurants, schools, business and industry locations, healthcare facilities, vending distributors, office coffee service distributors, big box retailers, theaters and convenience stores.