Performance Food Agrees to Buy Core-Mark in $2.5 Billion Deal


Performance Food Group Co. agreed to acquire Core-Mark Holding Co. for about $2.5 billion including debt, continuing its reach into the convenience store segment.

Core-Mark investors will get $23.875 plus 0.44 of a share of Performance Food Group stock for each of their shares, the companies said Tuesday in a joint statement.

The transaction values Westlake, Texas-based Core-Mark at about 11.5 times its estimated 2021 earnings before interest, taxes, depreciation and amortization, according to data compiled by Bloomberg. At least one current Core-Mark director will be added to the Performance Food board, the companies said.

Performance Food, which focused on distribution to restaurants and offices, expanded its footprint to include convenience store services in 2019 with its acquisition of distributor Eby-Brown Co., according to a statement at the time.

The Core-Mark transaction will help Richmond, Virginia-based Performance Food scale its geographic reach as well as convenience store presence.

Core-Mark is a wholesale distributor to convenience stores in the U.S. and Canada, which accounts for about 10% of its total sales. More than 60% of its revenue comes from cigarettes sales, with food accounting for 11%, according to a company presentation.

Combined, Performance Food and Core-Mark had $24.7 billion in revenue in the past year.

Shares of Core-Mark have climbed 72% in the past year, jumping 6.9% to $45.08 in New York trading Tuesday. Performance Food’s shares fell 6.2% to $48.52.

BMO Capital Markets Corp. was financial adviser to Performance Food, while Barclays Plc. advised Core-Mark, according to a statement.

©2021 Bloomberg L.P.

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