Sysco values Jetro deal at $29.1 billion, targets debt reduction after closing
Key Facts
Sysco announced a proposed agreement on March 30, 2026, to acquire Jetro Restaurant Depot for $29.1 billion, adding a cash-and-carry warehouse channel to its distribution and delivery network. The company valued the deal at 14.6 times Jetro’s operating income, or 13 times after expected synergies. Jetro shareholders will receive $21.6 billion in cash and 91.5 million Sysco shares, giving them about 16% of the company’s common shares after the deal closes. Sysco said the expansion targets a “higher-margin, growing and resilient” channel. The deal remains proposed, with completion subject to meeting closing conditions and obtaining regulatory approvals.
Sysco plans to finance the cash portion with $21 billion in debt and hybrid debt, alongside $1 billion in cash, stock or equity-linked securities. These are components of the financing plan, separate from the consideration Jetro shareholders will receive. According to Sysco’s annual report filed with the Securities and Exchange Commission, its unsecured bridge loan commitment stood at $22 billion at announcement, then fell to $19 billion after it arranged a $3 billion term loan. The financing reflects a substantial amount of expected borrowing, while the company announced plans to reduce net leverage by at least one turn during the first 24 months after closing. It also targets a long-term return to net leverage of about 2.75 times and plans to temporarily suspend share repurchases to accelerate debt reduction.
The deal comes as Sysco expects its core business to grow in fiscal 2027 on a standalone basis, excluding the acquisition. The company set sales growth of 6% to 7% and adjusted earnings-per-share growth of 9% to 11%, based on a 53-week fiscal year. Its guidance states that the 53rd week is included in the forecast baseline, so the figures do not describe performance excluding it. Sysco said earnings-per-share growth is based on about $100 million in cost reductions during the fiscal year, along with profit growth in its U.S. foodservice segment and double-digit profit growth in its international segment. The forecast presents the performance of the current business as the company plans to finance the deal and reduce debt later.
The expansion strategy is based on adding the cash-and-carry model to Sysco’s usual food distribution and delivery business. Jetro operates 166 large warehouses in 35 states, according to deal materials, and serves more than 725,000 independent restaurants and foodservice operators. Its revenue was about $16 billion in calendar 2025. Sysco sees the combination of the warehouses and its existing network as an opportunity to expand its presence in key markets while maintaining a channel it describes as resilient and growing. The company said it sees the potential to open more than 125 new Jetro locations in key markets over at least the next two decades, and the two companies do not expect workforce reductions as a result of the deal.
The stock reacted sharply when the deal was announced: Sysco shares fell 13% to $71.26 on March 30, according to the Associated Press. In a later disclosure, Sysco said the two companies received a second request from the Federal Trade Commission on May 27 for additional information and documents, and were preparing to respond. The request makes regulatory review one of the conditions still outstanding before closing. Sysco expects to complete the deal by the third quarter of its fiscal 2027, which corresponds to the first quarter of calendar 2027, subject to completing regulatory approvals and conditions. That puts the expected closing date after the additional information-gathering phase requested by the commission.