Performance Food Group Co. has attracted takeover interest from US Foods Holding Corp., according to people familiar with the matter—a potential deal that would create a food distribution powerhouse with a combined $100 billion in sales.
Rosemont, Illinois-based US Foods has been evaluating a potential acquisition of Performance Food and has expressed interest in a merger over recent months, the sources said, requesting anonymity due to the private nature of the discussions.
Shares of Performance Food surged as much as 6.2% on Friday—marking their largest intraday gain in three months—and closed up 4.8% in New York, pushing its market value to approximately $14.8 billion. Meanwhile, US Foods stock finished the day broadly flat, ending with a market capitalization of $18.6 billion.
The people cautioned there’s no certainty the talks will lead to a deal. Representatives for both US Foods and Performance Food declined to comment.
If completed, the transaction would establish the largest foodservice distributor in the United States, commanding an 18% share of the nation’s $371 billion market, according to Bloomberg Intelligence. That would edge out current leader Sysco Corp., which holds a 17% share, senior industry analyst Michael Halen wrote in a note.
Halen noted that Performance Food has a particularly strong presence in independent pizzerias, convenience stores, and the candy and snacks segment—areas where US Foods lacks significant exposure. A merger would deliver “meaningful scale and synergies,” though Halen warned it would negatively impact US Foods’ Ebitda margins.
US Foods serves a wide range of clients including restaurants, hospitals, schools, and hotels, with $37.9 billion in revenue last year. It employs around 30,000 people across more than 70 locations, according to the company’s website.
Performance Food operates across the U.S. and Canada through three business units: Performance Foodservice, which supplies restaurants; Vistar, a candy and snack distributor; and Core-Mark, which focuses on serving convenience stores.
According to Bloomberg Intelligence senior credit analyst Julie Hung, US Foods could mitigate pressure on its debt ratios by financing the acquisition with a higher share of equity. “Any increase in leverage would be temporary,” she wrote, though she also noted that the deal could face regulatory scrutiny.
In 2015, a planned $3.5 billion takeover of US Foods by Sysco Corp. was blocked by a federal judge who determined the merger would likely reduce competition in the food distribution space. US Foods went public the following year under its current name.
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