Sysco has a 15% market share in food distribution. Two of its biggest competitors recently were acquired and have been closing plants. U.S. Foodservice has about an 8% share and is currently owned by private equity firms Clayton, Dubilier & Rice and Kohlberg Kravis Roberts after being sold by former parent Royal Ahold in mid-2007. Performance Food Group was acquired a few months ago at a 43% premium by Blackstone Group and Wellspring Capital Management. Given the recent credit crisis, private equity firms do not have the amount of leverage they used to. They will be looking to cut costs and sell out at a profit. Sysco should be able to pick up considerable market share over the next few years.
Addtionally, Sysco will look for its own acquisitions in a time of market weakness. From its inception through end of 2007, Sysco has acquired 141 companies or divisions of other companies.
