Sysco Corporation is moving forward with its acquisition of Jetro Restaurant Depot, a transaction valued at approximately $29.1 billion. To help finance the deal, Sysco intends to raise $1 billion through a share sale. This capital raise is part of the funding strategy for the cash portion of the acquisition.
In addition to the planned share sale, Sysco has also secured a $750 million senior unsecured delayed draw term loan facility. This loan, referred to as the CoBank Term Loan, consists of two tranches: a $375 million six-year delayed draw term loan and a $375 million eight-year delayed draw term loan. The proceeds from this loan will also contribute to covering the cash consideration and related expenses for the JRD acquisition.
The overall financing for the Jetro Restaurant Depot acquisition, which includes JRD Unico, Inc. and Warehouse Realty, LLC, involves a substantial debt component. Sysco previously secured a $6 billion financing package, comprising a new $3.0 billion revolving credit agreement (expandable to $5.0 billion) and a $3.0 billion term loan credit agreement. The term loan proceeds are specifically designated to fund the merger, refinance JRD's indebtedness, and cover transaction fees. Sysco's total funding plan for the cash portion of the $29.1 billion acquisition involves $21 billion of new debt and hybrid debt, along with $1 billion from cash on hand or equity/equity-linked securities.
The acquisition is expected to be transformative for Sysco, enabling it to enter the high-margin Cash & Carry channel. The deal is projected to increase Sysco's revenue by approximately 20%, EBITDA by about 45%, and free cash flow by roughly 55%. It is also anticipated to be immediately accretive to earnings per share, with mid to high single-digit accretion in the first year and low to mid-teens accretion in the second year post-closing. Sysco aims to maintain its investment-grade credit ratings and dividend.
The transaction, unanimously approved by both companies' boards, is expected to close by the third quarter of Sysco’s fiscal year 2027, pending regulatory approvals. Upon closing, Jetro Restaurant Depot shareholders will receive $21.6 billion in cash proceeds and 91.5 million Sysco shares, giving them approximately 16% ownership of Sysco's outstanding common stock.
