Richmond, Virginia, Jan. 18 - Performance Food Group Company announced today it has signed a definitive merger agreement to be acquired by an affiliate of The Blackstone Group and Wellspring Capital Management in a transaction valued at approximately $1.3 billion. Under the terms of the merger agreement, Performance Food Group shareholders will receive $34.50 in cash for each outstanding share of Company common stock they hold representing a premium of 33.4% over the average closing share price for the 30 trading days ended January 17, 2008 and 42.6% over yesterday's closing share price of $24.19.
The Board of Directors of Performance Food Group has unanimously adopted the merger agreement and resolved to recommend that the Company’s shareholders approve the agreement. The transaction will be structured as a combination of Performance Food Group and Vistar Corporation, a foodservice distributor controlled by affiliates of Blackstone and Wellspring.
"We believe this transaction delivers outstanding value to our shareholders," said Steven L. Spinner, president and chief executive officer of Performance Food Group. "We are also excited about the opportunity to team up with Blackstone and Wellspring, who enthusiastically support our goals of growth, operational excellence and outstanding customer service. We are proud of our track record of growth, which is made possible by the dedication and commitment of the thousands of associates who make up the Performance Food Group family. We appreciate the confidence Blackstone and Wellspring have in this Company and believe this merger will provide us with important resources to further execute our operating and growth strategies."
"We are thrilled to be investing in such a high quality food distribution company," said Prakash Melwani, a senior managing director at Blackstone. "We believe that Performance Food Group is extremely well positioned and Blackstone and Wellspring will fully support the Company in continuing to deliver on its well-established reputation for operational excellence while building on its strong history of growth."
William F. Dawson, Jr., a partner at Wellspring said, "We are excited about the combination of Performance Food Group and Vistar, as it brings together two of the strongest companies and many of the best brands in the foodservice distribution industry. Performance Food Group has a history of consistent growth and has become one of the industry leaders. We believe that together with Vistar and the strong brands at Roma, the people of both companies will join to make the combined company stronger, more diverse and faster growing."
The transaction is not subject to any financing condition to the obligations of Blackstone and Wellspring. Under the terms of the Merger Agreement, Blackstone and Wellspring are obligated to pay the Company an aggregate $40 million termination fee if they breach their obligation to consummate the transaction. The Company will also solicit superior proposals from third parties during the next 50 days. The Company does not intend to disclose developments with respect to the solicitation process unless and until its Board of Directors has revised its recommendation to the shareholders.
The transaction is subject to receipt of shareholder approval and the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as well as satisfaction of other customary closing conditions, and is expected to be completed by the end of the second quarter of 2008. Following completion of the transaction, Performance Food Group’s stock will be de-listed and no longer trade publicly. The combined companies will be named Performance Food Group. The headquarters of Performance Food Group will remain in Richmond, Virginia. The headquarters of Vistar will remain in Denver, Colorado.
Evercore Group L.L.C. is acting as financial advisor to the Company. Bass, Berry & Sims PLC is acting as legal advisor to the Company.
Wachovia, Goldman Sachs and Credit Suisse are acting as financial advisors to Blackstone and Wellspring. Simpson Thacher & Bartlett LLP is acting as legal advisor to Blackstone and Wellspring.