Sysco to Expand in Ireland

Zacks

Sysco Corporation (SYY) has signed an agreement to acquire Ireland-based private foodservice supplier Crossgar Foodservice. Sysco has however not disclosed the financial terms of the deal, which is yet to receive Competition Authority approval in the Republic of Ireland.

The acquisition of Crossgar Foodservice will not only strengthen Sysco’s operations in Ireland, but will enhance the company’s portfolio with wider products including poultry, meat, chilled, frozen, grocery and non-food items. The acquisition was through Sysco’s subsidiary Pallas Foods, which the company acquired in 2009. Like Pallas Foods, Crossgar Foodservice will also retain its brand and management team.

Some other recent acquisitions by Sysco include the specialty food importer European Imports, Ltd. at the end of February. European Imports operates as an independent business and retains its management as well as its employees. Further, being well positioned in the specialty import products segment, European Imports will complement Sysco’s broad-line and specialty operations.

Last month, Sysco has delivered third-quarter 2012 earnings of 49 cents per share, which exceeded the Zacks Consensus Estimate of 42 cents on a better-than-expected top-line. It also exceeded the prior-year earnings of 48 cents per share.

Sysco's sales also advanced 7.6% on a year-over-year basis, to $10.5 billion in the third-quarter of 2012. The acquisition added 0.7% to sales growth while unfavorable currency translation decreased sales by 0.2%. Sales slightly beat the Zacks Consensus Estimate of $10.47 billion on better volumes.

Sysco, which competes with United Natural Foods, Inc. (UNFI) and Nash-Finch Company (NAFC), is the global leader in selling, marketing and distributing food products, and operates 177 distribution facilities serving approximately 400,000 customers.

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