3rd-largest US food distributor Performance Food files for a $100 million IPO

Performance Food Group, the third largest foodservice distributor in the US, filed on Wednesday with the SEC to raise up to $100 million in an initial public offering, although the deal size is likely just a placeholder. We estimate the company could raise $250 million or more. The food distributor markets its products to over 150,000 customer locations across the US, including restaurants, schools, hospitals, retailers and theaters.

Performance Food was taken private by Blackstone (73% pre-IPO stake) and Wellspring Management (19%) in 2008 for $1.3 billion and combined with foodservice provider Vistar (17% of net sales). Insiders plan to sell a portion of the offering. The company plans to use IPO proceeds to pay down debt, some of which was caused by a $220 million dividend to its private equity backers 2013.

Revenue increased 7% to $13.7 billion for the fiscal year ended June 28, 2014. Its gross margin improved slightly to 12.4%. Adjusted EBITDA grew 5% to $286 million. At quarter-end, Peformance Food had $1.5 billion of debt (5.1x debt/EBITDA).

The Richmond, VA-based company, which was founded in 1875 and booked $13.7 billion in sales for the 12 months ended June 30, 2014, did not disclose a ticker or an exchange. Credit Suisse, Barclays, Wells Fargo Securities and Morgan Stanley are the joint bookrunners on the deal. No pricing terms were disclosed.