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Performance Food Group Co. (PFG) announced Wednesday that it has agreed to acquire Cheney Bros. Inc., a prominent food service distributor in the Southeast, for $2.1 billion in cash. The acquisition, led by Skadden Arps Slate Meagher & Flom LLP for PFG and Davis Polk & Wardwell LLP for Cheney Bros., marks a significant expansion for PFG in the U.S. food distribution market.

Cheney Bros., a family-owned business backed by private equity firm Clayton Dubilier & Rice, is one of the leading food service distributors in the Southeast, with annual sales exceeding $3 billion. The deal is poised to enhance PFG’s distribution capabilities, particularly in the Southeastern U.S., where Cheney Bros. operates.

PFG to Acquire Cheney Bros for $2.1B : Strategic Expansion in the Southeast

"Cheney Brothers will be an outstanding addition to our Foodservice segment, and we are excited to welcome their many talented associates to the PFG family of companies," said George Holm, PFG's chair and CEO. He emphasized that the acquisition of Cheney Bros. will help PFG reach new heights, building on Cheney's strong presence in the region.

The acquisition will add five distribution facilities to PFG's portfolio, significantly increasing its capacity in Southeastern states. Cheney Bros. serves a diverse customer base, including restaurants, hotels, country clubs, and institutional groups, making it a valuable asset for PFG’s expansion strategy.

Transaction Details and Expected Closing

The deal has received approval from PFG’s board and is now awaiting federal antitrust clearance and other closing conditions. The transaction is expected to be finalized in 2025. J.P. Morgan is acting as the financial adviser to PFG, while Morgan Stanley & Co. is advising Cheney Bros.

Byron Russell, CEO of Cheney Bros., expressed optimism about the merger, stating, "I believe this transaction will bring together two winning organizations and create a significant platform for growth. Together, the companies will build upon each other's strengths and achieve outstanding success in the years ahead."

PFG to Acquire Cheney Bros for $2.1B : Legal Teams and Advisers

The legal teams behind this major acquisition include prominent names from top law firms. PFG is being advised by a team from Skadden Arps, including M&A partner Micah Kegley, antitrust and competition partner David Wales, and several other specialists in executive compensation, tax, intellectual property, capital markets, and banking.

On the other side, Cheney Bros. is represented by Davis Polk & Wardwell LLP, with a team led by corporate partner Louis Goldberg. Clayton Dubilier & Rice, the private equity firm backing Cheney Bros., is represented by Debevoise & Plimpton LLP, with a team led by M&A partners Spencer Gilbert and Kevin Schmidt.

Industry Impact

The acquisition of Cheney Bros. for $2.1 billion represents a significant move by PFG to strengthen its position in the competitive foodservice industry. With Cheney Bros.' strong regional presence and PFG’s expansive reach, the combined entity is well-positioned to drive growth and innovation in the food distribution market.

As the deal progresses toward finalization, both companies are set to leverage their combined strengths to enhance service delivery and operational efficiency, creating a robust platform for future success.