Performance Food to merge with Vistar
- March 1, 2008
by Heather B. Hayes
One of Richmond’s biggest publicly traded companies is going private. Performance Food Group, a Fortune 500 food distribution firm, is being sold for $1.3 billion to New York private equity firms The Blackstone Group and Wellspring Capital Management LLC.
When the deal is completed in June, Performance Food Group will merge with another recent Blackstone/Wellspring acquisition, Vistar Corp. The Denver-based food company specializes in frozen Italian foods and pizza, vending machine distribution and movie theater markets.
William F. Dawson Jr., a partner at Wellspring, says the combination will make the company “stronger, more diverse and faster growing.” The merger ultimately is expected to create a $9 billion distributorship.
According to the terms of the purchase, Performance Food Group shareholders will receive $34.50 per share, a price that was one-third higher than the company’s average market value in the month leading up to announcement of the deal.
Steven L. Spinner, CEO of Performance Food Group, says that the deal was not expected to affect any of the 500 jobs in the Richmond area, the 7,000 jobs at other locations nationwide, the current management structure or the company’s headquarters location.
Greg Wingfield, president of the Greater Richmond Partnership, laments the loss of a Fortune 500 company even as Richmond was set to gain another with the expected relocation of Altria Corp. from New York to Richmond. Nevertheless, he believes the Performance Food Group purchase will benefit the area.
“There will be dual headquarters in Richmond and Denver, so a lot of what happens will depend on where resources are placed and how they structure the various products,” he says. “But there is a very good chance that operations will grow here in Richmond because it is going to be a much bigger company with greater resources.”
Performance Food Group markets and distributes more than 68,000 national and private-label food and food-related products to more than 41,000 restaurants, hotels, cafeterias, schools, health-care facilities and other institutions.