Top U.S. Wholesale restaurant food distributor Sysco said on Monday it would buy catering supplier Jetro Restaurant Depot in a $29 billion deal, including debt. This deal would expand the distributor’s reach among price-conscious independent restaurants.
Family‑owned Jetro Restaurant Depot operates a wholesale cash‑and‑carry model, under which customers pay upfront for goods such as food, beverages and takeaway containers, complementing Sysco’s delivery network serving restaurants, hospitals and hotels. The deal would allow Sysco to enter the higher-margin “cash-and-carry” business, where Jetro has about 166 warehouse locations across 35 U.S. states.
“We’re thrilled to combine two industry leaders to create a preeminent multi-channel foodservice distribution platform,” said Kevin Hourican, Chair of the Board and Chief Executive Officer of Sysco. “Together, Sysco and Jetro Restaurant Depot will enhance value for small independent restaurants and the consumers they serve by expanding access to more affordable, fresh food products and delivering more choice and convenience.”
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Hourican also pointed that Jetro will benefit from access to Sysco’s best-in-class foodservice supply chain and logistics capabilities while Sysco will benefit from new ways to serve local customers.
“Today’s announcement is an exciting moment for Jetro Restaurant Depot and a clear recognition of the strength of our business model, and the teams who have built it over the past 50 years,” said Stanley Fleishman, Executive Chairman of Jetro Restaurant Depot. “From the start, our focus has been simple and straightforward, in line with the vision of our founder, Nathan Kirsh: to support independent shopkeepers, restaurant owners, and people running independent food businesses who depend on one-stop food service shopping at low prices seven days a week.
“Sysco is the best possible partner for our next chapter because they share our growth mindset and bring the systems and national and international supply logistic capabilities to help us grow across the U.S. and beyond,” Fleishman added.
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Jetro shareholders will receive $21.6 billion in cash and 91.5 million Sysco shares, giving them a roughly 16% stake in the combined company, the companies said. Shares of Sysco, which has a market capitalization of $39.2 billion, fell about 8% in premarket trading after the company said it would finance the acquisition with $21 billion in new and hybrid debt, along with $1 billion in cash and equity on hand.
This acquisition is the latest among several recent deals across consumer-facing industries. According to recent reports, luxury beauty group Estee Lauder is in the talks for a merger with Puig. Other companies like Unilever and Pernod Ricard are also entering mergers and acquisition deals to handle weaker demand and persistently higher costs.