Daily Management Review

London-based Brakes Group to be Bought for $3.1 Billion by US Based Sysco


London-based Brakes Group to be Bought for $3.1 Billion by US Based Sysco
With the aim to strengthen its presence in Europe, the largest U.S. food distributor, Sysco Corp, is all set to purchase London-based food distributor Brakes Group from Bain Capital Private Equity. The deal is estimated to be valued at about $3.1 billion.

Sysco Corp announced this takeover on Monday.
Sysco said in a statement that was issued from the US that the repayment of about $2.3 billion of Brakes' debt is included in the deal. The company said that it expects that the deal would immediately add to its earnings.
Eight months ago, the winning of a lawsuit by the Federal Trade Commission that essentially blocked a deal worth $3.5 billion where Sysco had intended to purchase smaller rival US Foods. The deliberations and the law suit went on for 18 months till Sysco opted out of the pursuit. This deal comes eight months after the let off.
In 2007 Bain had bought Brakes for about 1.3 billion pounds ($1.83 billion) for which Sysco had also laid a bid. However Bain walked away at an early stage.
The global stock market decline had halted the plans of Brakes to get itself listed on the London Stock Exchange in January, reported The Guardian. The company was taken private by Clayton, Dubilier & Rice Inc in 2002.
The Brakes Group has operations in the United Kingdom, Ireland, France, Sweden, Spain, Belgium and Luxembourg and had started off as a poultry supplier in 1958.
The present Chief Executive of the company Ken McMeikan would lead the new company that would be operated as a standalone company within Sysco.
Annualized sales of about $55 billion are expected to be generated by the combined company.
Only $806.4 million, or 1.7 percent of its revenue was generated by Sysco from its operations outside the United States and Canada for the year ended June 2015. Brakes had revenue of nearly $5 billion in fiscal 2015.

The deal is expected to be completed before the end of Sysco's fiscal year in July 2016 pending regulatory scrutiny, review and approval by European Union competition authorities.
While Freshfields Bruckhaus Deringer LLP and Ernst & Young LLP acted as legal and due diligence advisers to Sysco, Deutsche Bank Securities advised the company on financial matters.
The role of financial and legal advisers to Bain Capital Private Equity and Brakes Group was done by Goldman Sachs International and Baker & McKenzie LLP.
Sysco's shares were down 1.5 percent at $44.30 in early trading on Monday.
(Source: www.reuters.com) 

Science & Technology

Artificial Intelligence Helps NASA Find An 8th Planet In Orbit Of A Distant Star

Australian Research Success Could Mean Shatterproof Cell Phones Could Soon Be A Realityv

Top ten hi-tech events of the year

Tesla Considering Designing And Developing AI Chips On Its Own To Support Its Auto-Pilot Project

Verizon to introduce 5G in five American cities in 2018

Airbus, Rolls-Royce, Siemens to create an electric aircraft

Study Finds Treatment Efficacy Could Be Sacrificed For Reduced Side Effects In Cancer Therapies By Patients

Some Information About Their Self-Driving Car Research Has Been Disclosed By Apple Scientists For The First Time

A Massive Data Breach Was Covered Up By Uber By Paying Up Hackers

A City Is Can Be Converted To A Living Organism, Showcases China’s Huawei

World Politics

World & Politics

Phase Two Of Brexit Talks, Announced On Friday, Would Be Tough, Analysts Say

Elections in Italy: the last chance of Eurosceptics?

15 countries with the highest level of organized crime

Athens agreed with international lenders

EU Pressure Reportedly Forces UK To Bow Down, Could Agree To Pay £50bn For Brexit Divorce

$1 Billion Is The Price For Freedom For Arrested Saudi Prince In Corruption Crackdown: Reports

U.S. Capital Washington Appears To Be In Range Of The Latest Missile Launched By North Korea

Ten biggest fears of millennials