Here’s Why Sysco’s “Transformative” Acquisition Is Sinking Its Stock
Sysco's stock has fallen over 13% after announcing its $29.1 billion acquisition of Jetro Restaurant Depot, despite the deal being expected to bring long-term gains. The acquisition expands Sysco into a high-margin segment and is expected to increase its net revenue to nearly $100 billion.
Sysco has acquired Jetro Restaurant Depot for $29.1 billion. The deal is expected to bring long-term gains, with the combined company's net revenue increasing to nearly $100 billion. Sysco will pay Jetro shareholders $21.6 billion in cash and 91.5 million SYY shares. The acquisition is expected to be accretive to margins and free cash flow. Sysco expects $250 million in annualized net cost synergies within three years. The company has paused its share-repurchase program but will keep its dividend unchanged.
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