Sysco Corporation announced a $29.1 billion acquisition of Jetro Restaurant Depot, the nation’s largest cash‑and‑carry food‑service distributor. The deal consists of $21.6 billion in cash and 91.5 million Sysco shares, valuing Jetro at 14.6 times its 2025 operating income and 13.0 times when synergies are included.
The transaction is expected to add roughly $16 billion in annual revenue, $2.1 billion in EBITDA, and $1.9 billion in free cash flow to Sysco’s 2025 financials. Pro‑forma, the combined company will generate nearly $100 billion in revenue, a 45% increase in adjusted EBITDA, and a 55% lift in free cash flow, creating a multichannel platform that spans delivery‑based and high‑margin cash‑and‑carry operations.
Sysco’s CEO Kevin Hourican said the deal “creates a powerful multichannel foodservice platform, strengthens our financial profile, unlocks synergy while delivering more value, choice and convenience to customers nationwide.” Hourican also noted that Sysco is “the best at food distribution to the restaurant. Restaurant Depot is the best at the cash‑and‑carry format.”
The financing structure—$21 billion in new and hybrid debt and $1 billion in cash or equity—will raise Sysco’s leverage to about 5× from 3.5×, prompting a negative outlook from S&P Global Ratings. Sysco plans to pause share repurchases and moderate dividend growth for two years to de‑leverage by at least 1.0× within 24 months, while maintaining a long‑term net leverage target of 2.75×.
Jetro will operate as a standalone segment with its existing leadership, and two Jetro directors will join Sysco’s board. Sysco intends to open 125 new Jetro locations over the next two decades, leveraging its national supply chain to expand the cash‑and‑carry footprint. The deal is expected to close in the third quarter of Sysco’s fiscal year 2027, subject to regulatory approval and customary closing conditions.
Investors reacted negatively, citing concerns over the financing structure and increased leverage. The stock fell over 12% on the announcement, the worst day in six years, reflecting market anxiety about the debt load and the pause in share repurchases. Nonetheless, analysts view the acquisition as a strategic pivot that diversifies Sysco’s revenue base and positions it for higher‑margin growth in the resilient cash‑and‑carry channel.
Sysco’s 2025 guidance remains unchanged: sales growth of 3% to 5% and adjusted EPS at the high end of $4.50 to $4.60. The company’s prior quarter results—Q1 2026 sales of $21.1 billion (up 3.2%) and adjusted EPS of $1.15—provide context for the expected accretion from the deal, which is projected to be immediately EPS‑accretive and to enhance free cash flow generation.
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