Sysco Corporation (SYY - Free Report) has agreed to purchase the specialty food importer European Imports, Ltd., which would help Sysco stand out more prominently in the competitive industry.
Though the financial terms of the deal were not disclosed, the acquisition is expected to close within a few weeks.
After the completion of the deal, the Chicago-based European Imports will operate as an independent business and will retain its management as well as its employees. Further, being well positioned in the specialty import products segment, European Imports will complement Sysco’s broad-line and specialty operations.
European Imports generated annual sales of $124 million in its last fiscal year; and other than importing cheese specifically for the Chicago market, it imports meat, seafood and pastries from around the world and distributes its products to the central United States with concentration in the Midwest, Texas, Arizona, Colorado and Atlanta.
Houston-based food services and distribution company – Sysco recently delivered second-quarter 2012 earnings (excluding one-time items) of 46 cents per share, exceeding both the Zacks Consensus Estimate of 44 cents and the prior-year earnings of 45 cents per share.
Sysco's sales advanced 9.2% on a year-over-year basis, to $10.2 billion in the second-quarter of 2012. Acquisitions contributed to the sales by 0.7%, while unfavorable currency translation decreased sales by 0.1%. However, food inflation increased to 6.3% in the quarter versus 4.5% in the prior-year quarter, which negatively impacted the quarterly sales.
Headquartered in Houston, Texas, Sysco's multi-year business transformation project is on track, employing 300 full timers. The company is through with the design and technology development work. Presently, it is testing systems and processes.
We currently have a Zacks #3 Rank on Sysco shares, which translates into a short-term Hold rating. Sysco, which competes with United Natural Foods, Inc. (UNFI - Free Report) and Nash-Finch Company , is the global leader in selling, marketing and distributing food products, and operates 177 distribution facilities serving approximately 400,000 customers. For fiscal year 2011 that ended July 2, 2011, the company generated record sales of more than $39 billion.