US Foods Holding Corp. announced that it has successfully completed the previously announced $970 million all cash acquisition of Smart Foodservice Warehouse Stores ("Smart Foodservice"). The transaction that closed today excludes the Smart & Final retail grocery business, which was previously separated from Smart Foodservice.

The company previously arranged financing from Citigroup Global Markets and Bank of America Securities. Pursuant to the Commitment Letter, the Commitment Parties have committed to provide US Foods with a $700.0 million senior secured term loan facility (the “2020 Term Loan Facility”), subject to the terms and conditions set forth in the Commitment Letter. US Foods intends to use the proceeds of the 2020 Term Loan Facility to fund, in part, the Smart Foodservice Acquisition (as defined herein) and to pay fees and expenses related to the Smart Foodservice Acquisition.

The Commitment Letter replaced in its entirety the commitment letter we obtained from the Commitment Parties in connection with our entry into the Merger Agreement referred to below, which provided for a $700.0 million senior secured term loan “B” facility. The Commitment Parties’ obligation to provide the 2020 Term Loan Facility is subject to the satisfaction or waiver of customary conditions, including the consummation of the Smart Foodservice Acquisition.

Founded in 1955 and headquartered in the greater Portland, Oregon area, Smart Foodservice operates 70 small-format cash and carry stores across California, Washington, Oregon, Idaho, Nevada, Utah and Montana that serve small and mid-sized restaurants and other food business customers with a broad assortment of products. Smart Foodservice will operate as a separate operating unit within US Foods, with minimal integration required.

"We are pleased to welcome Smart Foodservice to the US Foods family," said Chairman and CEO Pietro Satriano. "With our shared commitment to supporting restaurant operators and providing best-in-class customer service, Smart Foodservice will complement our CHEF’STORE cash and carry model and provide a platform to enhance our presence in this attractive channel."

US Foods funded the purchase price for the acquisition with cash on hand and the proceeds from a $700 million term loan.

US Foods expects to achieve approximately $20 million in annual run-rate cost synergies by the end of 2023, primarily through purchasing efficiencies and expansion of private brand products.