Richmond's Performance Food Group Co. (NYSE: PFGC) will acquire Riviera Beach, Florida's Cheney Brothers, one of the largest private companies in South Florida, for $2.1 billion in cash.
The food distributor was founded by the Cheney family in 1925 and is now being sold by the family, along with private equity firm Clayton Dubilier & Rice. It has 1.5 million square feet of distribution space and about 3,600 employees.
Cheney Brothers ranked No. 5 on the Business Journal list of Top Private Companies in South Florida with more than $3 billion in revenue.
Cheney Brothers recently generated $3.2 billion in revenue, said PFG, which posted $58.3 billion in revenue for the fiscal year ended June 29.
“This acquisition will expand and enhance our offerings to a high-quality and diverse customer base," George Holm, chairman and CEO of PFG, said in a statement. "We have long admired the success of Cheney Brothers in the Southeastern U.S. and believe that the combination of our organizations will push the business to new heights.”
PFG said it expects to achieve $50 million of annual “run-rate synergies” within three years of the acquisition by identifying cost reduction measures in procurement, operations and logistics. PFG also hopes to expand sales of its private brands to independent restaurants that are customers of Cheney Brothers.
“I have watched PFG grow into one of the country’s largest foodservice distributors by fostering new business relationships and maintaining a strong company culture," Byron Russell, CEO of Cheney Brothers, said in a statement. "I believe this transaction will bring together two winning organizations and create a significant platform for growth."
Pending approvals, the companies plan to close the deal during 2025.
Cheney Brothers worked with Morgan Stanley & Co. as financial adviser and Davis Polk & Wardwell LLP as legal counsel on the deal. PFG consulted with J.P. Morgan as financial adviser and Skadden, Arps, Slate, Meagher & Flom LLP as legal counsel.