Performance Food Group to issue $1 billion in senior notes

RICHMOND - Performance Food Group Company (NYSE: NYSE:PFGC), a leading food and foodservice distribution company in North America, announced its plan to issue $1 billion in senior notes due 2032. The proceeds from the debt offering, along with borrowings under its revolving credit facility, are earmarked to fund the acquisition of Cheney Bros, Inc., as well as related fees and expenses.

The offering's success is not contingent upon the completion of the acquisition, suggesting financial flexibility for the company. Performance Food Group's subsidiary, Performance Food Group, Inc., will issue the notes, which will be guaranteed by its direct parent company, PFGC, Inc., and by the issuer's existing and future material wholly-owned domestic restricted subsidiaries, with certain exceptions.

The senior notes have not been registered under the Securities Act of 1933, and are to be offered only to qualified institutional buyers and non-U.S. persons outside the United States, in compliance with the respective regulations. This strategic move aligns with the company's growth strategy, which includes expanding its reach and capabilities through acquisitions.

Performance Food Group, founded and headquartered in Richmond, Virginia, operates over 150 locations and serves a diverse customer base that includes restaurants, schools, healthcare facilities, and convenience stores, among others. The company's success is attributed to its approximately 37,000 associates who are dedicated to fostering strong customer and community relationships.

This press release is issued in accordance with Rule 135(c) under the Securities Act, and it is neither an offer to sell nor a solicitation of an offer to buy any securities. This announcement is for informational purposes only and does not constitute an offer, solicitation, or sale in any jurisdiction where such activities are prohibited.

The company cautions readers that this release contains forward-looking statements, which are subject to various risks and uncertainties that could cause actual results to differ materially from those anticipated. These statements are based on current expectations and involve known and unknown risks, which are detailed in the company's filings with the Securities and Exchange Commission.

The information provided in this article is based on a press release statement from Performance Food Group Company.

In other recent news, Performance Food Group (PFG) reported a robust fourth-quarter performance for the fiscal year 2024, displaying an impressive 18.4% year-over-year growth in adjusted EBITDA. The company's strategic acquisitions have been a key factor in this growth, with a $2.1 billion acquisition of Cheney Bros and the purchase of José Santiago, a broadline foodservice distributor in Puerto Rico. These acquisitions are part of PFG's expansion strategy in the Southeast and the Caribbean.

PFG's management provided guidance that aligns with market expectations, forecasting another year of approximately 10% EBITDA growth. This outlook remains positive despite challenges faced by the restaurant and convenience store industries. The company's growth potential is also reflected in the revised price targets set by Piper Sandler and Truist Securities, with both firms maintaining positive ratings on the stock.

Piper Sandler raised PFG's price target to $87.00 from the previous $80.00, while Truist Securities increased the price target to $88 from the previous $86. Both firms cited PFG's strong fourth-quarter performance and successful navigation of industry headwinds as reasons for their confidence in the company's future growth.

For the fiscal year 2025, PFG projects net sales to be between $60 billion and $61 billion, with adjusted EBITDA ranging from $1.6 billion to $1.7 billion. The company also plans to drive growth through organic investments, share repurchases, and debt reduction. These recent developments highlight PFG's commitment to its growth strategy and financial performance.

InvestingPro Insights

As Performance Food Group Company (NYSE: PFGC) ventures into a significant acquisition with the issuance of $1 billion in senior notes, investors and analysts are closely monitoring the company's financial health and market position. According to InvestingPro data, Performance Food Group is currently trading at a high P/E ratio of 26.06, indicating a premium valuation relative to its near-term earnings growth. The company's revenue for the last twelve months as of Q4 2024 stood at $54.68 billion, with a modest revenue growth of 2.49%. Despite its weak gross profit margins of 12.03%, the company remains a prominent player in the Consumer Staples Distribution & Retail industry.

InvestingPro Tips suggest that while 7 analysts have revised their earnings downwards for the upcoming period, the company is trading at a low revenue valuation multiple, which could be attractive to value investors. Additionally, Performance Food Group's liquid assets exceed its short-term obligations, providing a cushion for operational and financial flexibility. This is particularly relevant as the company embarks on funding its acquisition of Cheney Bros, Inc., where liquidity and solvency are key considerations.

For investors seeking a deeper dive into Performance Food Group's financial metrics and analyst predictions, InvestingPro offers additional tips and insights. There are currently 8 more InvestingPro Tips available, which can provide further guidance on the company's profitability, dividend policy, and future outlook. Interested readers can find these valuable tips at: https://www.investing.com/pro/PFGC

It's worth noting that the company's next earnings date is projected for November 6, 2024, which will be a pivotal moment for stakeholders to assess the impact of the acquisition and the company's overall financial trajectory.

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