US Foods announces a $211 million repurchase of shares from Sachem Head Capital Management LP.
Takeaway Points
- US Foods to buyback $211 million shares from Sachem Head Capital Management LP.
- The purchase of the shares is a part of the company’s $1 billion share repurchase program authorized on June 1, 2024.
- On Aug 8, US Foods gave a report for the Second Quarter Fiscal Year 2024.
US Foods Shares Repurchase
US Foods Holding Corp., one of America’s largest foodservice distributors, on Tuesday announced that it entered into a purchase agreement to repurchase about $211 million of the company’s common shares from Sachem Head Capital Management LP at $52.28 per share and $2 million in excise taxes.
Dave Flitman, CEO of US Foods, commented about the repurchase, saying, “Today’s $211 million share repurchase reflects continued confidence in our strategy and our ability to execute our long-range plan and achieve our financial targets. We remain laser-focused on improving the business to generate profitable growth and capture share in our target customer types, while executing our capital deployment priorities. Given our strong execution and confidence in our ability to deliver our 2027 financial targets, we believe our shares remain significantly undervalued. As a result, we will be more aggressive buying back our shares over the balance of this year.”
Scott Ferguson, Founder and Managing Partner, Sachem Head, said, “US Foods continues to make incredible progress under Dave’s strategic leadership and his strong team. I am confident in their ability to grow profitability over the long term. We remain substantial shareholders of the Company and believe there is a bright future ahead for US Foods.”
The purchase of the shares is a part of the company’s $1 billion share repurchase program authorized on June 1, 2024.
US Foods Second Quarter Fiscal Year 2024 Report.
On Aug 8, US Foods gave a report for the Second Quarter Fiscal Year 2024. According to the company, net sales increased 7.7% to $9.7 billion; total case volume increased 5.2%; independent restaurant case volume increased 5.7%; gross profit increased 7.2% to $1.7 billion; net income was $198 million; adjusted EBITDA increased 13.2% to $489 million; diluted EPS increased 9.6% to $0.80; adjusted diluted EPS and increased 17.7% to $0.93.
Dirk Locascio, CFO, said that “We delivered record profitability in the second quarter through our balanced approach to drive top- and bottom-line gains despite the operating environment. Maintaining our disciplined approach to capital deployment and intense focus on driving long-term shareholder value creation, we closed on the IWC acquisition, repurchased $41 million of shares and further reduced our net leverage while continuing to invest in the business. Given our strong first half of the year and outlook for the remainder of 2024, we are reiterating our net sales, Adjusted EBITDA and Adjusted Diluted EPS guidance.”
The company said that it acquired IWC Food Service, a broadline distributor that serves the greater Nashville area, during the second quarter of fiscal year 2024 for about $220 million, which was funded with cash from operations and closed on April 5, 2024.
About US Foods
With a promise to help its customers Make It, US Foods is one of America’s great food companies and a leading foodservice distributor, partnering with approximately 250,000 restaurants and foodservice operators to help their businesses succeed. With more than 70 broadline locations and approximately 90 cash and carry stores, US Foods and its 30,000 associates provides its customers with a broad and innovative food offering and a comprehensive suite of e-commerce, technology and business solutions. US Foods is headquartered in Rosemont, Ill.
