Business Combinations

3 Months Ended

Sep. 28, 2019

Business Combinations [Abstract]

Business Combinations

5. Business Combinations

During first quarter of fiscal 2019, the Company paid cash of $31.5 million for an acquisition. This acquisition did not materially affect the Company’s results of operations.

The acquisition of Eby-Brown Company LLC (“Eby-Brown”) in the fourth quarter of fiscal 2019 included contingent consideration, including earnout payments in the event certain operating results are achieved during a defined post-closing period. Total contingent consideration outstanding was $86.4 million as of September 28, 2019 and $82.6 million as of June 29, 2019. Earnout liabilities are measured using unobservable inputs that are considered a Level 3 measurement.

 On July 1, 2019, we entered into a Membership Interest Purchase Agreement to acquire Reinhart Foodservice, L.L.C. (“Reinhart”) from Reyes Holdings, L.L.C. in a transaction valued at $2.0 billion, or approximately $1.7 billion net of an estimated tax benefit to PFG of approximately $265 million.  The closing of the contemplated transaction is subject to customary conditions, including the receipt of required regulatory approvals. The $2.0 billion purchase price is expected to be financed with borrowing under the ABL

Facility (as defined below), net proceeds from new senior unsecured notes and net proceeds from an offering of shares of the Company’s common stock, subject to market conditions, of $300 million to $400 million. On September 27, 2019, PFG Escrow Corporation, a wholly-owned subsidiary of PFGC, Inc. to be merged with and into Performance Food Group, Inc., issued $1,060.0 million of Notes due 2027 (as defined below) to finance the transaction. See Note 6. – Debt for further discussion of the newly issued debt.