Food and foodservice distributor Performance Food Group is set to significantly expand its presence in the U.S. Southeast by acquiring Cheney Brothers, Inc., as the company announced a pending deal Aug. 14 along with reporting its 2024 fourth quarter and full-year financial results.

Cheney Acquisition

PFG agreed to acquire Riveria, FL-based Cheney Brothers — a foodservice distributor currently owned by private equity firm Clayton, Dubilier & Rice — for $2.1 billion in cash.

A news released detailed that Cheney generates approximately $3.2 billion in revenue annually. The purchase amount of $2.1 billion reflects a multiple of 13.0x to Cheney Brothers’ unaudited 12-month Adjusted EBITDA.

Cheney has been family-owned and operated since 1925, growing into a global distributor with over 1.5 million square feet of distribution space and an inventory of more than 65,000 SKUs across gourmet and everyday food items.

The purchase price is expected to be financed with borrowing on PFG’s ABL facility and new Senior Unsecured Notes.

“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”, PFG Chairman & CEO George Holm said in the company’s news release. “This acquisition will expand and enhance our offerings to a high-quality and diverse customer base. 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. We are excited for what the future holds for the newest addition to PFG.”

PFG will add an additional five broadline distribution facilities across the Southeastern U.S. states with the acquisition of Cheney Brothers, which is expected to close in 2025.

Richmond, VA-based PFG has more than 150 locations in North America, serving over 300,000 customer locations that range from independent and chain restaurants; businesses; schools and healthcare facilities; vending and office coffee service distributors; big box retailers; theaters; and convenience stores. The company has over 37,000 employees.

Fiscal 4Q Results

For its 4Q24 that ended June 29, PFG posted total sales of $15.2 billion that were up 2.2% year-over-year. Case volume growth in the company’s independent Foodservice business and acquisitions attributed to the increase, offset by case declines in Convenience and Vistar business.

The company’s 4Q organic sales increased 0.7% compared to the same time a year prior. PFG said the increase was led by growth in Performance Brands cases and growth in cases sold to Foodservice’s Chain business.

PFG’s 4Q gross profit of $1.7 billion increased 4.7% compared to the same time a year prior. A shift in cases sold and growth in the independent channel and Performance Brands was attributed to the increase in gross profit. The company’s gross margin was 11.5%, up 0.2% year-over-year.

Adjusted EBITDA of $1.5 billion rose 10.5% year-over-year.

PFG also shared in its financial report that it acquired Puerto Rico food distributor José Santiago during July. José Santiago brands itself as the oldest, largest and most-advanced full-line foodservice distributor in Puerto Rico and the Caribbean.

Full-Year 2024 Results

For the 12 months ended June 29, PFG’s full-year total sales of $58.3 billion increased 1.8% year-over-year. Case volume growth in the company’s Foodservice business, an increase in selling price per case and recent acquisitions attributed to the increase in net sales, offset by case declines in Convenience business.

The company’s net income increased by $38.7 million year-over-year to $435.9 million. The increase was attributed to a rise in operating profit of $60.6 million, offset by an increase in interest expense and income tax expense.

Adjusted EBITDA increase by 10.5% to $1.5 billion year-over-year.

“PFG had a strong finish to fiscal 2024, showing an acceleration in sales, adjusted EBITDA and Earnings Per Share growth in the fiscal fourth quarter,” Holm said in the company’s financial release. “I am excited for fiscal 2025 and expect our underlying business momentum to continue. We are also pleased to announce two value-creating deals with the proposed purchase of Cheney Brothers and the acquisition of José Santiago, which closed in July. The addition of these two organizations is expected to provide significant revenue and profit growth opportunities.”

2025 Outlook

In releasing its 2025 fiscal guidance, PFG said it expects 1Q25 net sales to be approximately $15.2 billion to $15.5 billion. Adjusted EBITDA is expected to be in the range of $400 million to $420 million.

For the full fiscal year, the company expects net sales to be between $60 billion to $61 billion, and adjusted EBITDA to be between $1.6 billion to $1.7 billion.

The company’s 2025 outlook does not include financial benefits from the acquisition of Cheney Brothers but does include expected results for José Santiago— a Puerto Rican foodservice distributor acquired in July.