Woolworths has announced it intends to acquire a 65% stake in PFD Food Services as it extends its strategic partnership with the foodservice network.
Under the proposed $552 million deal, current owners the Smith family will retain a 35% holding and PFD, Australia’s largest privately owned foodservice network, will continue to operate independently. Woolworths will also wholly own PFD’s freehold properties, including its 26 distribution centres, which it will lease back to the company.
PFD supplies dry goods, frozen and chilled products, fresh seafood, meat, confectionery, paper products and cleaning supplies to the B2B sector, such as pubs/clubs, airlines, aged care homes, convenience stores, fast food outlets, schools, child care and correctional facilities, among others.
The deal, which is subject to ACCC approval, is expected to be finalised by the end of the year and will be funded by Woolworths’ existing cash reserves.
Woolworths Group CEO Brad Banducci said the two companies shared a vision for ‘continues innovation, customer focus and investment in the food sector’.
“This investment is a logical adjacency for Woolworths Group and further supports the evolution of the Group into a Food and Everyday Needs Ecosystem. It will build on our existing partnership with PFD, the number two player in the large and fragmented out-of-home foodservice and non-retail business-to-business markets,” Mr Banducci said.
“The investment will also unlock synergies for both businesses across the combined network and fleet. We will help to support PFD’s growth through access to our logistics, digital and data analytics and operational capabilities.
“For Woolworths Group, it will enhance store range localisation and provide fleet synergies through better route and capacity optimisation across our combined network.”