Source Credit : Portfolio Prints
Sysco announced on Monday that it will acquire catering supplier Jetro Restaurant Depot in a $29 billion deal, significantly expanding the top U.S. food distributor’s reach among price-conscious independent restaurants.
Investors reacted negatively to the announcement, with Sysco shares falling as much as 14.8%. The company said it plans to finance the acquisition primarily through $21 billion in new and hybrid debt, along with $1 billion in cash and equity.
The move comes amid a broader wave of consolidation across consumer-facing industries, as companies such as Unilever, Estée Lauder, and Pernod Ricard pursue scale to navigate weakening demand and persistently high costs.
“This deal reflects Sysco recognizing that its traditional distribution model is under real structural pressure—and choosing to act before that pressure becomes existential,” said Brad Haller, senior partner in West Monroe Partners’ mergers and acquisitions practice.
Jetro Restaurant Depot, a family-owned business, operates a wholesale cash-and-carry model in which customers pay upfront for goods such as food, beverages, and packaging supplies. This complements Sysco’s delivery-based network serving restaurants, hospitals, and hotels.
The acquisition gives Sysco entry into a higher-margin segment, with Restaurant Depot operating approximately 166 warehouse locations across 35 U.S. states.
“Cash-and-carry—particularly Restaurant Depot—is highly recession-resilient,” Sysco CEO Kevin Hourican told Reuters. “During economic downturns, this segment tends to gain market share due to its low-price positioning.”
Under the terms of the deal, Restaurant Depot shareholders will receive $21.6 billion in cash and 91.5 million Sysco shares, valued at roughly $7.5 billion as of Friday’s close. This would give them an estimated 16% stake in the combined company.
The transaction follows a series of attempted consolidations in the food distribution sector. Last year, US Foods ended merger talks with Performance Food Group, a deal that would have combined the nation’s second- and third-largest distributors to better compete with Sysco.
Sysco itself has faced regulatory pushback in the past. In 2015, a U.S. federal judge blocked its $3.5 billion acquisition of US Foods after the Federal Trade Commission argued it would reduce competition and lead to higher prices.
However, Hourican expressed confidence that this deal will receive regulatory approval, noting that Sysco and Restaurant Depot operate in distinct channels with minimal customer overlap.
“The facts are clear: this is a different channel, a different primary customer, and there are meaningful synergies in how we can deliver value to the end consumer,” he said.
Discussions between the two companies have been ongoing for years. Succession planning also played a role in the timing of the sale. Restaurant Depot founder Nathan Kirsh, now in his 90s, does not have family members actively running the business. According to Hourican, the Kirsh family viewed Sysco as the best steward to carry the company forward.
Sysco expects the acquisition to boost earnings per share by a mid- to high-single-digit percentage in the first year following completion, which is anticipated by the third quarter of fiscal 2027.
The company also announced it will pause its share repurchase program while reaffirming its full-year financial outlook. Earlier this year, Sysco raised its profit forecast, supported by resilient demand despite ongoing macroeconomic pressures.
