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Company: Performance Food Group (PFGC)
Business: Power Performance Group This is a food and nutrition company that works through three segments: Foodservice, specialty (previously “Vistar”) and convenience. Its food segment distributes the line of national brands, customer brands, as well as food and food related foods and foods, independent and multi -storey networks and other institutions. Its special segment specializes in the distribution of chocolates, snacks, drinks and other national items for trade, office coffee, theater, retail, hospitality and other channels. Its convenient segment distributes candy, snacks, drinks, cigarettes, other tobacco products, food and food -related foods, and other stores in all North America. It sells and distributes more than 250,000 food and food related foods, clients across the United States, from about 144 distributed facilities to more than 300,000 customer locations.
The stock market value: 16.34 billion dollars ($ 104.40 per share)
Activist: Sahem Head of Capital
Interest ownership: ~ 2 – 4%
Average cost: N/a
Activist comment: Sachem Head was founded in 2013 by Scott Ferguson, the first investment specialist hired on Peson, where he worked for nine years. Sachem Head has a firm value attachment but we believe they really found their activist in 2020 with their investments in Alin. Scott Ferguson took a place in the Council in Olin – the first place of the public campaign council, which he took in an investment that did not enter the group – and created great value there. Most recently, after nominating the director of the majority, Sahem head settled Three places board in the USAand most recently settled on the place of the board at Twilio In April 2024, the reception of places of the Council means both commitments and contributions, and this philosophy and style really pay off Sachem Head.
What is happening
August 21 The head of Sachem delivered Notification of the nomination For the next four candidates, the Food Group’s election at the 2025 annual meeting: D. Ferguson, David A. Tai, R. Chris Cretter and Karen M. King. In addition, Sachem Head urged the company to study the potential business combination with American food and, there is no transaction, further improving the profitability.
Behind the scenes
Food Group performance – Third -largest Food Distribution Company in North America, behind Sysco and American foodWhich together they command approximately 38% of the market share. The company works through three segments. The main food segment (61.8% EBITDA) distributes national, customers and foods with food and food. Convenience (20.6%) distributes candy, snacks, drinks, cigarettes and other tobacco products. Specialty (17.61%) distributes candy, snacks, drinks and other items with specialized suppliers.
On August 21, Sachem Had gave a nomination for the next four candidates who are in favor of the PFG Council at the annual meeting of 2025: Scott D. Ferguson (founder and head of the Sachem partner), David A. The, R. Chris Cretter and Karen M. King.
In addition, Sachem Head urged PFG to study the potential business combination with US products and, lack of transaction, further improving profitability.
Ferguson and Toy, who previously worked on the US Council on Food as part of the Sochem Cooperation Agreement. In the US Foods, Sachem Head helped to install a new CEO and a managerial team who catalized the successful turn of the company. Ever since Sachem Head has filed 13D in US Foods, the company’s stock has doubled.
The other two candidates have as much experience: Cretaceous was a financial director for Sysco for six years and King – executive vice president in McDonald’s and serve on Aramark Board. This is a nominated nominee team that is good for PFG navigation through prompt improvements and strategic assessment.
Although there is an opportunity to improve operating margins in the company, the main catalyst here is the merger from the United States. Potential synergies that can be achieved in such a combination are very difficult to ignore. These synergies are expressed with another proposed industry consolidation, SYSCO 2013 attempt to unite with US products. Publicly, this transaction is projected to provide an annual synergium of at least $ 600 million over three -four years compared to EBITDA in the US $ 826 million. In other words, the predicted synergies made up more than 70% of the US EBITDA, and the number that was thrown away privately were even greater. This is an unusual figure and is largely characteristic of the landscape for the distribution of food and the amount of purchases, logistics and rationalization of the warehouses that have these companies. Extrapping these figures into the American Food Case/PFG and applying a similar level of synergies using the PFG EBITDA ($ 1.2 billion), which contains most synery potentials, the merger can give $ 800 million to $ 1 billion in synergies. Moreover, if there is anyone who could check this analysis, it would be the Sachem director Chris Cretter, who at the time was the Sysco CEO.
However, the Sysco/US Foods transaction was ultimately blocked by the Federal Trade Commission with the antimonopoly concern focused on the No. 1 and No. 2, which eliminates the Sysco national competitor. There are several reasons why the merger between the United States and the nutritional performance may have another result. For the first time, it would be the fusion of the second and third largest players, not the first and second; And unlike Sysco, PFG is not a national competitor, virtually no traces on the west coast. In addition, today’s regulatory environment for Trump administration is much more favorable than when the Obama administration considered the SYSCO transaction. While any approved transaction is likely to require imprisonment in certain markets, and there is no guarantee of approval, and, as potential synergy, the Council is obliged to study its shareholders at least to merge the possibility of fermentation of the US food. And that’s all the Sochema head asks. They do not force the company to sell, but rather ask them to evaluate this potentially profitable opportunity that was brought to them.
In July 2025, the United States provided for the 8-k submission that they turned to PFG about the potential combination. But the tango requires two and still pfg is not engaged with them. Given these modern moods, sincere consideration of this transaction is unlikely to take place without claiming a slight pressure on the board, and Sahema’s head does it in the form of a proxy threat that they will have a great chance to win. Not only the proxy -boy about the forces of argumentation, and Sachem Head has a great, but also the company’s joint -stock base contains many alternative assets that are most likely supporting such a program of the activist than traditional index. These shareholders have a history of perceptions of good activists, and the potential up the plan can provide, and will be impressed by a strong slate head, which sets them enough to hear the fund.
Moreover, there are assumptions that even before the participation of Sochem Hed Changes in C-Suite were inevitable. For more than 17 years, the company has been managing CEO George Holm, a widely respected industry leader. Now, according to rumors, the Holm will soon be replaced by the President of the company Scott E. McFerson. The transition of the CEO, similar to this, creates the perfect time for a strategic transaction for anyone involved, except for perhaps McFurson. If two companies of similar sizes merge when merge equal, the assessment is often an easy part. These are social problems that are often violators. And this dynamics can be worse if the merger is offered when the seat president finally receives a call to the CEO. However, McFurson was not Lifer PFG and was only with the company for a year and a half, so social problems associated with the survival management must be achieved.
Tips and their advisers and some shareholders often viciously oppose any type of “selling” activity and often for careful reason. Often, we are the largest critics of this type of short -term activity that gives the future value to the private capital fund or strategic buyer instead of shareholders. But the dissertation “Association of Companies” is different, especially if there is such convincing synergy, which create value for all shareholders. The transaction between players of this size should occur primarily as a combination based on stocks, which would allow PFG and the United States shareholders to participate in the long -term cost creation resulting from the merger.
We expect such an experienced activist, such as Sachem Head, will be able to convince the advice of this, and a great result for shareholders will be a settlement to add to the council of two directors, as well as the creation of a new committee focused on the assessment of strategic alternatives, at least one of the new directors of the committee. This can lead to a transaction that can become the wind for anyone involved.
But if the evaluation is eventually made, and the offline path is determined by the best result, it remains a strong company and high -profit capital business with the ability to improve the costs and margins at the edges – the areas that the Sachem Head directors will also be valuable.
Ken Skvir is the founder and president of the 13D monitor, an institutional scientific and research service for shareholders’ activity, as well as the founder and managers of the 13D -activist fund portfolio, a mutual fund that investes in the portfolio of 13D investments. Food Group’s performance belongs to the fund.
