Clayton, Dubilier & Rice and Kohlberg Kravis Roberts to Acquire U.S. Foodservice From Ahold
Clayton, Dubilier & Rice, Inc. (CD&R) and Kohlberg Kravis Roberts
& Co. L.P. (KKR) announced today a definitive agreement to acquire
U.S. Foodservice, the second largest broadline foodservice distributor
in the U.S., from Royal Ahold N.V. (NYSE: AHO). Funds affiliated with
CD&R and KKR are equal partners in the transaction, valued at $7.1
billion.
With revenues in 2006 of more than $19 billion, U.S. Foodservice's
operations cover a geographic area in which over 95 percent of the
U.S. population resides. The company provides food and related
products to independent restaurants, healthcare and hospitality
customers, educational institutions and prominent multi-unit
restaurant companies.
Michael M. Calbert, a Member of KKR, stated, "KKR has a long
history of acquiring industry-leading franchises. 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. We and our partners at CD&R look forward to working
with the company's management team, which has done an excellent job of
refocusing the business in recent years, to continue executing the
strategic initiatives in place."
"U.S. Foodservice is well positioned in a stable and growing
industry that we know well from prior investments," said Richard J.
Schnall, the partner leading 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. We are very pleased to be
partnering with KKR and the company's outstanding management team to
build an even more valuable enterprise."
"We are pleased to be partnering with two outstanding firms - two
of the oldest private equity firms in the business - which have a
great understanding of our industry, from both a financial and
operating standpoint," said Robert Aiken, President of U.S.
Foodservice. "We have great confidence the strategic and financial
support of these two firms will enable us to grow and better serve our
customers."
Completion of the transaction, which is expected to occur in the
second half of the year, is subject to regulatory approvals, approval
of Ahold's shareholders and customary closing conditions.
Financing for the transaction is being provided by Citigroup,
Deutsche Bank, Goldman, Sachs & Co., J.P. Morgan Securities Inc.,
Morgan Stanley & Co. and Royal Bank of Scotland.
Citigroup, Deutsche Bank, Morgan Stanley & Co. and Rabobank are
acting as financial advisors to CD&R and KKR. Simpson Thacher &
Bartlett LLP is acting as legal advisor to the buyers and Debevoise &
Plimpton LLP is acting as legal counsel in connection with the
financing.
About Clayton, Dubilier & Rice
Clayton, Dubilier & Rice, Inc. (CD&R) is a leading private equity
investment firm that has earned consistent, superior investment
returns using an integrated operational and financial approach to
building and growing portfolio businesses. CD&R's portfolio
investments have included Alliant Foodservcie, sold to Ahold in 2001,
and Brakes Foodservice, the U.K.'s market leader with operations in
France, as well as Hertz, Culligan International, and VWR
International. CD&R recently announced an agreement to acquire
ServiceMaster in a transaction valued at $5.5 billion. The firm is
based in New York and London. (www.cdr-inc.com)
About KKR
Kohlberg Kravis Roberts & Co. (KKR) is one of the world's oldest
and most experienced private equity firms specializing in management
buyouts. Founded in 1976, it has offices in New York, Menlo Park,
London, Paris, Hong Kong and Tokyo. Throughout its history, KKR has
brought a long-term investment approach to its portfolio companies,
focusing on working in partnership with management teams and investing
for future competitiveness and growth. Since its founding, KKR has
completed more than 150 transactions with an aggregate value of over
$279 billion. (www.kkr.com)
About U.S. Foodservice
U.S. Foodservice is a recognized leader in the American
foodservice industry, delivering food and related products to
independent restaurants, healthcare and hospitality customers,
educational institutions and prominent multi-unit restaurant
companies. U.S. Foodservice is very well-suited to serve this market.
U.S. Foodservice's combination of customer focus, industry-leading
commitment to service and a powerful portfolio of national and private
label brands allows them to deliver exceptional value to every
customer.