Rykoff-Sexton and JP Foodservice Become US Foodservice
In early 1998, the merged company Rykoff-Sexton-JP Foodservice changed its named to US Foodservice (USF) and dropped all Rykoff-Sexton-JP Foodservices brands and logos. In addition, US Foodservice focused exclusively on sales, marketing and distribution.
To help fund the merger, US Foodservice sold the Rykoff-Sexton Manufacturing Division (RSMD) to the private equity firm of Kohlberg & Company and RSMD senior management. RSMD manufactured over 1,400 food and non-food items and generated about $115 million in 1997. RSMD had manufacturing plants in Los Angeles, CA (S.E. Rykoff & Co.) which manufactured non-food items such as detergents, cleaning compounds, refuse container liners, cutlery, straws and sandwich bags, paper napkins, placemats, chefs' hats, coasters, paper lace doilies and a line of low temperature dishwashers. The plant in Englewood, NJ (Sexton Foods) manufactured coffee and spices. The 1800 Churchman Avenue plant in Indianapolis, IN (Sexton Quality Foods) manufactured more than 500 items including canned products, frozen products, refrigerated products, powdered products, shortenings/oils, dressings, sauces, syrups, flavorings, dry mixes, soup bases. RSMD supplied Rykoff-Sexton/US Foodservice but did some contract manufacture for restaurant chains and other private label brands.
The new company would operate under the name United Signature Foods L.L.C. Prior to the purchase, Kohlberg & Company required US Foodservice to enter into a 6-year supply contract with U.S. Foods LLC that increased 6% over the term. Gross proceeds from the supply agreement and asset sale totaled $101 million. Even with the sale of RSMD, some of John Sexton & Co. signature products live on. For instance, US Foodservice still markets Alamo Zestful Seasonings, Jamaica Relish (developed by Sexton Food Chef Tony Bartolotta), Chunky Bleu Cheese Dressing and Kettle Rich soups.
In 2000, US Foodservice was acquired by Dutch grocerRoyal Ahold for $26 per share or $3.6 billion and the assumption of all outstanding US Foodservice debt. In 2006, Ahold stated that US Foodservice was generating $19.2 billion in sales.
In 2007, Royal Ahold sold US Foodservice through a $7.2 billion leverage buyout conducted by Clayton, Dubilier and Rice and Kohlberg Kravis Roberts. A side note, KKR purchased Beatrice Foods in 1986. Beatrice owned Sexton Foods from 1968 to 1983. As of June 2007, US Foodservice is jointly owned by Clayton, Dubilier and Rice and Kohlberg Kravis Roberts.
In 2009, US Foodservice (Chicago, IL) still privately held, was the second largest broadline foodservice distributor in the U.S. with $18.97 billion in revenue and 24,687 employees. SYSCO was the largest foodservice distributor.
Read more about this topic: Sexton Foods