Sysco Calls $29B Restaurant Depot Deal “Transformational,” Eyes EPS Accretion and $250M Synergies

Core Insights - Sysco has announced a definitive agreement to acquire Restaurant Depot for $29.1 billion, which is characterized as a "transformational" deal that will create a nationwide omni-channel platform serving diverse customer needs across delivery and in-store purchasing [4][7]. Market Overview - The U.S. cash-and-carry channel, which includes Restaurant Depot, represents an estimated total addressable market of $60 billion to $70 billion, separate from Sysco's broadline delivery channel valued at over $300 billion [1]. - Restaurant Depot operates 166 large-format warehouse locations across 35 states, serving over 725,000 local customers, with 55% of U.S. independent restaurants located within a 30-minute drive of a store [8]. Financial Expectations - The acquisition is expected to be accretive to Sysco's earnings per share (EPS) by mid- to high-single-digit in the first year and low- to mid-teens in the second year [6][14]. - Management anticipates a boost in pro forma revenue by approximately 20%, adjusted EBITDA by about 45%, and free cash flow by around 55% [6][14]. - Restaurant Depot generated approximately $16 billion in revenue and $2 billion in EBITDA in calendar 2025, with an EBITDA margin of 13% [12]. Synergies and Integration - Sysco expects to achieve approximately $250 million in annualized cost synergies within three years, primarily from procurement and supply chain efficiencies, with no revenue synergies modeled [15]. - The integration of Restaurant Depot will be characterized as "light touch," with the company retaining its leadership team and operational approach [17][18]. Governance and Ownership - Upon closing, Restaurant Depot shareholders will own about 16% of Sysco's common stock, with two directors from Restaurant Depot expected to join Sysco's board [20][21].