February 23, 2016

Sysco has agreed to acquire the European food distributor, Brakes Group, from Bain Capital Private Equity in a deal worth $3.1 billion including the repayment of approximately $2.3 billion of Brakes Group’s debt.

Launched in 1958 as a poultry supplier to caterers in Britain, Brakes Group continued growing until it reached a scale where it could be listed on the London Stock Exchange in 1986, before being taken private in 2002, according to the New York Times. Bain Capital has had ownership of the company since 2007 when it acquired it from private equity firm Clayton, Dubilier & Rice for £1.3 billion (US$1.83 billion). Today the Brakes Group serves 50,000 customers across Europe and has operations in the United Kingdom, Ireland, France, Sweden, Spain, Belgium and Luxembourg.

“Since we bought Brakes Group in 2007, the business has been transformed with capital investment of more than 100 million British pounds in an e-commerce platform, multi-temperature distribution infrastructure, and customer service enhancements,” said Dwight Poler, a managing director of Bain Capital Private Equity in a recent press release. “There is still a huge market opportunity ahead that I am confident Brakes Group is very well placed to deliver with Sysco.”

This move by Houston, Texas-based Sysco will give the company the opportunity for growth it was seeking last year when it attempted to acquire its U.S. rival, US Foods for $3.5 billion. The U.S. Federal Trade Commission blocked the deal on anti-trust concerns however, claiming that the merging of the two companies would reduce market competition and raise prices, reports Bloomberg. Currently, Sysco has operations across the U.S., Canada, Ireland, Northern Ireland, and The Bahamas, as well as in Mexico and Costa Rica through joint ventures. The addition of Brakes Group to its portfolio will extend its presence throughout Europe as well.

The Brakes Group reported revenue of approximately $5 billion in 2015 – a year on year increase of 6.5%. And upon closing of the deal, which is expected to occur by July of this year, the combined companies are expected to see annualized sales of $55 billion.