BOCA RATON, FLA. — Sysco Corp. has a two-pronged approach when it comes to mergers and acquisitions: expanding in existing markets and entering new geographies.
In a Feb. 20 presentation at the Consumer Analyst Group of New York conference in Boca Raton, Joel T. Grade, executive vice-president and chief financial officer of Sysco, briefly discussed the role of mergers and acquisitions for the Houston-based company.
A day before Sysco’s presentation at CAGNY, the company announced the acquisition of Doerle Food Services, a Broussard, La.-based broadline distributor with approximately $250 million in annual food service distribution sales. Mr. Grade said the acquisition of Doerle fits Sysco’s strategy of expanding in existing markets, in this case, the Southeastern United States.
The acquisition of Doerle comes a little more than a month after Sysco reached an agreement to acquire Kent Frozen Foods, a U.K.-based food service distributor.
“Those (acquisitions of Doerle and Kent) would qualify as those things that would supplement, opened again, whether it’s geographies or areas that we actually see customer synergies in our existing markets,” Mr. Grade said.
Meanwhile, Sysco continues to explore “thoughtfully expanding into new geographic markets,” Mr. Grade said.
Case in point, the company’s February 2016 acquisition of London-based Brakes Group for $3.1 billion. Brakes Group supplies an extensive range of fresh, refrigerated and frozen food products, as well as non-food products and supplies, to more than 50,000 food service customers. The group of companies has leading market positions in the U.K., France and Sweden, in addition to a presence in Ireland, Belgium, Spain and Luxembourg. Brakes Group supplies more than 50,000 products, including an extensive portfolio of more than 4,000 private brand products.
“(Brakes) obviously entered us really into the European market in a strong way,” Mr. Grade said.
More recently, Sysco reached an agreement to acquire HFM FoodService, a Hawaii-based broadline distributor with approximately $290 million in annual sales. Mr. Grade described the HFM deal as a move into a “another opportunity to enter into a new market with what we believe is very exciting opportunities.” FBN