(April 11) LITTLE ROCK, Ark. — One of the nation’s largest foodservice distributors will acquire the Razorback State’s largest broadline foodservice distributor.
Performance Food Group, Richmond, Va., announced April 10 it would acquire the common stock of Quality Foods Inc., Little Rock.
Performance will pay $95 million for Quality Foods, according to a news release. However, that price could increase to $119 million if Quality Foods achieves certain performance levels in the next three years.
Jeff Pryor, Quality Foods’ produce director, said fresh produce accounts for only 5% of the distributor’s foodservice sales.
“I just found out (about the deal) this morning,” he said April 11. “We’re hoping fresh moves more and does better.”
Quality Foods, a 20-year member of Performance Food Group’s Pocahontas buying and marketing group, had $375 million in sales during 2001.
Quality Foods, through its distribution centers in Little Rock, Batesville, Miss., and Magee, Miss., distributes to foodservice customers in Arkansas, Mississippi, Louisiana, Tennessee, Texas, Oklahoma and Missouri.
Michael Gray, Performance Food Group’s president and chief executive officer, in comments made to attendees of a New York securities conference April 9, said the time is ripe for further consolidation in the foodservice distribution industry.
“There are opportunities for consolidation,” he said. “We’re very optimistic about the possibilities for us to increase our market share through additional acquisitions. Our pipeline is very full today. The industry is being fueled by continued competitive pressures from the critical mass that large distributors have built.”
Performance Food Group is the third-largest U.S. foodservice distributor, marketing and distributing more than 44,000 national and private-label food and related products to 32,000 hotel, cafeteria, schools, health care institutions and other institutional customers. The company has 39,000 stock-keeping units throughout its system, Gray said. Its average customer drop is $1,300.