- Acquisition expands PFG’s geographic reach and market
diversification into the growing convenience store channel, adding
approximately $17 billion to net sales, resulting in total PFG
pro-forma LTM net sales of approximately $44 billion
- Adds a complementary customer-centric operating model with
consistent go-to-market selling cultures focused on customer
service
- Enhances attractive customer base and product offerings,
building upon the company’s current foodservice focus within the
convenience channel
- Expected to be accretive to Adjusted Diluted Earnings Per Share
(EPS) in the first full fiscal year following closing of the
transaction, excluding expected cost synergies
- Expected to generate approximately $40 million of annual net
cost synergies, achieved by the thirdfull year following the
closing of the transaction
Performance Food Group Company (PFG) (NYSE: PFGC) and Core-Mark
Holding Company, Inc. (Core-Mark) (NASDAQ: CORE) today announced
that they have entered into a definitive agreement pursuant to
which PFG will acquire Core-Mark in a stock and cash
transaction.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20210518005391/en/
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. The transaction values Core-Mark
at approximately $2.5 billion, including Core-Mark’s net debt. Upon
closing of the transaction, Core-Mark shareholders will own
approximately 13% of the combined company. Core-Mark expects to
continue paying its current quarterly dividend through the
completion of the transaction.
The transaction will create a best-in-class convenience business
within PFG’s Vistar segment that will include the Core-Mark and
Eby-Brown businesses. 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 will continue in his role as
President and Chief Executive Officer of Core-Mark, following
closing of the transaction. Tom Wake will continue as President and
Chief Executive Officer of Eby-Brown, reporting to Mr.
McPherson.
“We are excited to announce the strategic acquisition of
Core-Mark and welcome the organization to Performance Food Group,”
said George Holm, PFG Chairman, President & Chief Executive
Officer. “Core-Mark is an outstanding company that we believe will
significantly strengthen our business diversification and expansion
into the convenience store channel. 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.”
“On behalf of PFG’s Vistar segment, I echo George’s enthusiasm
for this transaction,” said Patrick Hagerty, Executive Vice
President of PFG and Chief Executive Officer of Vistar. “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 is one of the largest wholesale distributors to the
convenience retail industry in North America with approximately $17
billion in net sales. The company has approximately 7,500 employees
and operates 32 distribution centers across the United States and
Canada. Core-Mark services approximately 40,000 customer locations
in all 50 states in the U.S., five Canadian provinces and two
Canadian territories.
“This transaction brings together two companies known for their
customer-focused approach and dedication to their employees,” said
Scott McPherson, Core-Mark President and Chief Executive Officer.
“As part of our continuous focus to maximize shareholder value and
better serve our customers, our Board evaluated the transaction and
determined this combination provides our investors immediate value
and the opportunity to participate in the 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. I’d like to thank the entire Core-Mark team for
their hard work and focus in helping us reach this exciting
milestone.”
Upon closing of the transaction, at least one current Core-Mark
director will be added to the PFG Board of Directors.
Compelling Strategic and Financial
Benefits
- Accelerates PFG’s diversification and adds highly
complementary assets in the convenience store channel: With the
closing of this transaction, PFG will add approximately $17 billion
of net sales, resulting in total PFG pro-forma LTM net sales of
approximately $44 billion.
- 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.
Transaction Financing
The transaction is not conditioned on financing. PFG expects to
fund the cash portion of the transaction consideration with
borrowing from its asset-based revolving credit facility and the
issuance of new senior unsecured notes.
Timing and Approvals
The transaction is expected to close in the first half of
calendar 2022, subject to U.S. federal antitrust clearance,
Core-Mark shareholder approval, and other customary closing
conditions. The transaction is not subject to PFG shareholder
approval.
Advisors
BMO Capital Markets Corp. acted as the exclusive financial
advisor to PFG, and J.P. Morgan Securities LLC provided a fairness
opinion to the Board of Directors of PFG. Skadden, Arps, Slate,
Meagher & Flom LLP acted as legal counsel to PFG. Barclays
acted as the exclusive financial advisor to Core-Mark. Weil,
Gotshal & Manges LLP acted as legal counsel to Core-Mark.
Conference Call and Webcast
Information
Performance Food Group will host a webcast and conference call
at 9:00 AM Eastern Time today, May 18, to discuss the transaction.
The live audio webcast and presentation slides will be available on
http://investors.pfgc.com/ under Events & Presentations. The
conference call may be accessed by Conference ID: 8235877
Participant Toll Free Dial-In Number: (877) 569-1666
Participant International Dial-In Number: (919)
666-6542
Please dial in 10 to 15 minutes prior to the call start time.
Following the Company's remarks, the conference call will include a
question-and-answer session with the investment community. A
digital recording of the conference call will be available for
replay two hours after the call's completion. To access the
recording, please use one of the following Dial-In Numbers and the
Conference ID shown above.
Participant Replay Toll Free Dial-In Number: (855) 859-2056
Participant Replay International Dial-In Number: (404)
537-3406
About Performance Food Group Company
Built on the many proud histories of our family of companies,
Performance Food Group is a customer-centric foodservice
distribution leader headquartered in Richmond, Virginia. Grounded
by roots that date back to a grocery peddler in 1885, PFG today has
a nationwide network of over 100 distribution facilities, thousands
of talented associates and valued suppliers across the country.
With the goal of helping our customers thrive, we market and
deliver quality food and related products to over 200,000 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. Building strong relationships is core to PFG’s
success – from connecting associates with great career
opportunities to connecting valued suppliers and quality products
with PFG’s broad and diverse customer base. To learn more about
PFG, visit pfgc.com.
About Core-Mark
Core-Mark is one of the largest marketers of fresh, food and
broad-line supply solutions to the convenience retail industry in
North America. Founded in 1888, Core-Mark offers a full range of
products, marketing programs and technology solutions to
approximately 40,000 customer locations in the U.S. and Canada
through 32 distribution centers (excluding two distribution
facilities the Company operates as a third-party logistics
provider). Core-Mark services traditional convenience stores,
grocers, drug stores, mass merchants, liquor and specialty stores,
and other stores that carry convenience products. For more
information, please visit www.core-mark.com.
Forward-Looking Statements
This communication contains forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. These statements include, but are not limited to,
statements related to our expectations regarding the performance of
PFG and Core-Mark’s respective business, financial results,
liquidity and capital resources, and other non-historical
statements. You can identify these forward-looking statements by
the use of words such as “outlook,” “believes,” “expects,”
“potential,” “continues,” “may,” “will,” “should,” “could,”
“seeks,” “projects,” “predicts,” “intends,” “plans,” “estimates,”
“anticipates” or the negative version of these words or other
comparable words.
Such forward-looking statements are subject to various risks and
uncertainties. The following factors, in addition to those
discussed under the section entitled Item 1A. Risk Factors in the
PFG Annual Report on Form 10-K for the fiscal year ended June 27,
2020 filed with the Securities and Exchange Commission (the “SEC”)
on August 18, 2020, and the section entitled Item 1A. Risk Factors
the Core-Mark Annual Report on Form 10-K for the fiscal year ended
December 31, 2020 filed with the SEC on March 1, 2021, as such
factors may be updated from time to time in our respective periodic
filings with the SEC, which are accessible on the SEC’s website at
www.sec.gov, could cause actual future results to differ materially
from those expressed in any forward-looking statements:
- the integration of PFG’s acquisition of Reinhart;
- the material adverse impact the COVID-19 pandemic has had and
is expected to continue to have on the global markets, the
restaurant industry and the convenience retail industry, and PFG
and Core-Mark’s businesses specifically, including the effects on
vehicle miles driven, on the financial health of PFG and
Core-Mark’s business partners, on supply chains, and on financial
and capital markets;
- competition in PFG and Core-Mark’s industries is intense, and
PFG or Core-Mark may not be able to compete successfully;
- PFG and Core-Mark operates in low margin industries, which
could increase the volatility of their respective results of
operations;
- PFG may not realize anticipated benefits from operating cost
reduction and productivity improvement efforts;
- PFG’s profitability is directly affected by cost inflation and
deflation and other factors;
- PFG does not have long-term contracts with certain of
customers;
- group purchasing organizations may become more active in PFG’s
industry and increase their efforts to add customers as members of
these organizations;
- changes in eating habits of consumers;
- extreme weather conditionsincluding earthquake and natural
disaster damage;
- reliance on third-party suppliers, including Core-Mark’s
reliance on relatively few suppliers;
- labor relations and cost risks and availability of qualified
labor;
- volatility of fuel and other transportation costs;
- inability to adjust cost structure where one or more of
competitors successfully implement lower costs;
- PFG may be unable to increase sales in the highest margin
portion of its business;
- changes in pricing practices of suppliers;
- PFG or Core-Mark’s growth strategy may not achieve the
anticipated results;
- risks relating to acquisitions, including the risk that PFG is
not able to realize benefits of acquisitions or successfully
integrate the businesses PFG acquires;
- environmental, health, and safety costs;
- the risk that PFG or Core-Mark fails to comply with
requirements imposed by applicable law or government regulations or
substantial changes to governmental regulations, including
increased regulation of electronic cigarette and other alternative
nicotine products;
- a portion of PFG and Core-Mark’s sales volume is dependent upon
the distribution of cigarettes and other tobacco products, sales of
which are generally declining;
- if the products PFG distributes are alleged to cause injury or
illness or fail to comply with governmental regulations, and PFG
may need to recall products and may experience product liability
claims;
- PFG’s reliance on technology and risks associated with
disruption or delay in implementation of new technology;
- costs and risks associated with a potential cybersecurity
incident or other technology disruption;
- product liability claims relating to the products distributed
by PFG or Core-Mark, including litigation related to Juul products
and other litigation;
- adverse judgements or settlementsor unexpected outcomes in
legal proceedings;
- negative media exposure and other events that damage PFG or
Core-Mark’s reputation;
- decrease in earnings from amortization charges associated with
acquisitions;
- impact of uncollectibility of accounts receivable;
- difficult economic conditions affecting consumer
confidence;
- risks relating to federal, state, and local tax rules and
changes to federal, state or provincial income tax
legislation;
- increases in excise taxes or reduction in credit terms by
taxing jurisdictions;
- the cost and adequacy of insurance coverage and increases in
the number or severity of insurance and claims expenses;
- risks relating to PFG or Core-Mark’s outstanding
indebtedness;
- PFG or Core-Mark’s ability to raise additional capital;
- PFG or Core-Mark’s ability to maintain an effective system of
disclosure controls and internal control over financial
reporting;
- Core-Mark’s dependence on the convenience retail industry for
revenues;
- Core-Mark’s dependence on qualified labor, senior management
and other key personnel;
- competition in Core-Mark’s distribution markets, including
product, service and pricing pressures related to COVID-19;
- the dependence of some of Core-Mark’s distribution centers on a
few relatively large customers;
- manufacturers or retail customers adopting direct distribution
channels;
- failure, disruptions or security breaches of Core-Mark’s
information technology systems;
- Core-Mark’s reliance on manufacturer discount and incentive
programs and cigarette excise stamping allowances;
- disruptions in suppliers’ operations, including the impact of
COVID-19 on Core-Mark’s suppliers as well as supply chain,
including potential problems with inventory availability and the
potential result of higher cost of product and freight due to high
demand of products and low supply for an unpredictable period of
time;
- Core-Mark’s ability to achieve the expected benefits of
implementation of marketing initiatives;
- failure to maintain PFG or Core-Mark’s brand and
reputation;
- attempts by unions to organize employees;
- increasing expenses related to employee health benefits;
- changes to minimum wage laws;
- risks related to changes to Core-Mark’s workforce, including
reductions to hours, headcount and benefits as a result of
COVID-19;
- legislation, regulations and other matters negatively affecting
the cigarette, tobacco and alternative nicotine industry;
- potential liabilities associated with sales of cigarettes and
other tobacco products;
- reduction in the payment of dividends;
- currency exchange rate fluctuations;
- Core-Mark ability to borrow additional capital;
- restrictive covenants in Core-Mark’s credit facility;
- changes to accounting rules or regulations; and
- the following risks related to the proposed acquisition of
Core-Mark ( the “Core-Mark Transaction”):
o the risk that U.S. federal antitrust
clearance or other approvals required for the Core-Mark Transaction
may be delayed or not obtained or are obtained subject to
conditions that are not anticipated that could require the exertion
of PFG or Core-Mark’s respective management’s time and resources or
otherwise have an adverse effect on PFG or Core-Mark;
o the possibility that conditions to the
consummation of the Core-Mark Transaction, including approval by
Core-Mark stockholders, will not be satisfied or completed on a
timely basis and accordingly the Core-Mark Transaction may not be
consummated on a timely basis or at all;
o uncertainty as to the expected Core-Mark
performance of the combined company following completion of the
Core-Mark Transaction;
o the possibility that the expected synergies
and value creation from the Core-Mark Transaction will not be
realized or will not be realized within the expected time
period;
o the exertion of PFG or Core-Mark’s
respective management’s time and resources, and other expenses
incurred and business changes required, in connection with
complying with the undertakings in connection with U.S. federal
antitrust clearance or other third-party consents or approvals for
the Core-Mark Transaction;
o the risk that unexpected costs will be
incurred in connection with the completion and/or integration of
the Core-Mark Transaction or that the integration of Core-Mark will
be more difficult or time consuming than expected;
o availability of debt financing for the
Core-Mark Transaction and PFG’s refinancing plans on terms that are
favorable to PFG;
o a downgrade of the credit ratings of PFG or
Core-Mark’s indebtedness, which could give rise to an obligation to
redeem existing indebtedness;
o potential litigation in connection with the
Core-Mark Transaction may affect the timing or occurrence of the
Core-Mark Transaction or result in significant costs of defense,
indemnification and liability;
o the inability to retain key personnel;
o the possibility that competing offers will
be made to acquire Core-Mark;
o disruption from the announcement, pendency
and/or completion of the Core-Mark Transaction, including potential
adverse reactions or changes to business relationships with
customers, employees, suppliers or regulators, making it more
difficult to maintain business and operational relationships;
and
o the risk that, following the Core-Mark
Transaction, the combined company may not be able to effectively
manage its expanded operations.
Accordingly, there are or will be important factors that could
cause actual outcomes or results to differ materially from those
indicated in these statements. These factors should not be
construed as exhaustive and should be read in conjunction with the
other cautionary statements that are included in this release and
in PFG’s and Core-Mark’s filings with the SEC. Any forward-looking
statement, including any contained herein, speaks only as of the
time of this release or as of the date they were made and neither
PFG nor Core-Mark undertake to update or revise them as more
information becomes available or to disclose any facts, events, or
circumstances after the date of this release, as applicable, that
may affect the accuracy of any forward-looking statement, except as
required by law.
Important Additional Information and Where to Find It
In connection with the proposed transaction, PFG intends to file
with the SEC a registration statement on Form S-4 (the
“Registration Statement”), which will include a prospectus with
respect to the shares of PFG’s common stock to be issued in the
proposed transaction and a proxy statement for Core-Mark’s
stockholders (the “Proxy Statement”). Core-Mark will send the Proxy
Statement to its stockholders, and each party may file other
documents regarding the proposed transaction with the SEC. This
communication is not a substitute for the Form S-4, the Proxy
Statement or any other document that Core-Mark may send to its
stockholders in connection with the proposed transaction.
INVESTORS AND SECURITY HOLDERS OF PFG AND CORE-MARK ARE URGED TO
READ THE FORM S-4, THE PROXY STATEMENT AND ANY OTHER RELEVANT
DOCUMENTS (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) THAT
WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN
THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT
INFORMATION ABOUT PFG, CORE-MARK, THE PROPOSED TRANSACTION AND
RELATED MATTERS. Investors and security holders of PFG and
Core-Mark will be able to obtain free copies of the Form S-4, the
Proxy Statement and other documents (including any amendments or
supplements thereto) containing important information about PFG and
Core-Mark once those documents are filed with the SEC, through the
website maintained by the SEC at www.sec.gov. Copies of the
documents filed with the SEC by PFG will be available free of
charge on PFG’s website at www.investors.pfgc.com or by contacting
PFG’s Investor Relations department at investor@pfgc.com. Copies of
the documents filed with the SEC by Core-Mark will be available
free of charge on Core-Mark’s website at ir.core-mark.com/investors
or by contacting Core-Mark’s Investor Relations department at
ir@core-mark.com.
Participants In The Solicitation
PFG, Core-Mark and certain of their respective directors,
executive officers and employees may be deemed to be participants
in the solicitation of proxies from the stockholders of Core-Mark
in connection with the proposed transaction.
Information about the directors and executive officers of PFG is
set forth in its (i) Form 10-K for the fiscal year ended June 27,
2020, which was filed with the SEC on August 18, 2020 and (ii)
proxy statement for its 2020 annual meeting of stockholders, which
was filed with the SEC on October 9, 2020, and on its website at
www.pfgc.com.
Information about the directors and executive officers of
Core-Mark is set forth in its (i) Form 10-K for the fiscal year
ended December 31, 2020, which was filed with the SEC on March 1,
2021 and (ii) proxy statement for its 2021 annual meeting of
stockholders, which was filed with the SEC on April 5, 2021, and on
its website at www.core-mark.com.
Investors may obtain additional information regarding the
interest of such participants by reading the Form S-4, the Proxy
Statement and other materials to be filed with the SEC in
connection with proposed transaction when they become
available.
No Offer or Solicitation
This communication is for informational purposes only and does
not constitute, or form a part of, an offer to sell or the
solicitation of an offer to sell or an offer to buy or the
solicitation of an offer to buy any securities, and there shall be
no sale of securities, in any jurisdiction in which such offer,
solicitation or sale would be unlawful prior to registration or
qualification under the securities laws of any such jurisdiction.
No offer of securities shall be made except by means of a
prospectus meeting the requirements of Section 10 of the Securities
Act of 1933, as amended, and otherwise in accordance with
applicable law.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210518005391/en/
PFG Investors: Bill Marshall VP, Investor Relations (804)
287-8108 Bill.Marshall@pfgc.com
PFG Media: Trisha Meade Director, Communications &
Engagement (804) 285-5390 mediarelations@pfgc.com
Core-Mark Investors: David Lawrence VP, Treasury &
Investor Relations (800) 622-1713 x 7923
david.lawrence@core-mark.com
Core-Mark Media: Aaron Palash / Jack Kelleher Joele
Frank, Wilkinson Brimmer Katcher (212) 355-4449
Core Mark (NASDAQ:CORE)
Gráfico Histórico do Ativo
De Abr 2024 até Mai 2024
Core Mark (NASDAQ:CORE)
Gráfico Histórico do Ativo
De Mai 2023 até Mai 2024