U.S. Foodservice still buying Distributor acquires Calif. firm in sixth purchase in 10 months


November 03, 1998|By Ted Shelsby | Ted Shelsby,SUN STAFF

U.S. Foodservice Inc. of Columbia continued its aggressive acquisition pace with the announcement yesterday that it has reached an agreement to purchase Joseph Webb Foods Inc. of Vista, Calif.

It was U.S. Foodservice's second acquisition within 11 days and its sixth over the past 10 months. Details of the transaction, including the price, were not disclosed.

Webb has $157 million in annual sales, about three times the sales of J. H. Haar & Sons Inc. of Kearny, N.J., which U.S. Foodservice purchased last month.

Jim Miller, chairman and chief executive officer of U.S. Foodservice, called the addition of Webb a "step forward in our strategy of filling in the gaps of our geographical coverage."

He added: "The combination of Joseph Webb with U.S. Foodservice's existing presence in the Los Angeles and Northern California markets will give us significant advantages in servicing customers statewide."

Under the agreement, Gerald Rosen and Allan Motter will continue to serve as chairman and president, respectively, of what will become the Joseph Webb division of U.S. Foodservice.

Rosen said his company was excited about joining forces with the fast-growing Howard County food distributor. "We believe that we will be able to better serve our customers by utilizing the many strengths of U.S. Foodservice," he said.

Bonna Walker, spokeswoman for U.S. Foodservice, said she did not expect any job cuts as a result of the transaction, which is scheduled to close at the end of the month.

She said there is $20 million to $30 million in overlapping accounts between the companies, and the business would be handled by the office that makes the most sense.

Godfrey M. Birckhead, an analyst with Blaylock & Partners L.P., called U.S. Foodservice's purchase of Webb "a fill-in acquisition" and said there would be others in the future as the local company continues a pattern of growth through acquisitions.

If there is a recession, he added, the consolidation of the food distribution business would likely speed up as smaller food service companies will become more receptive to takeover.

U.S. Foodservice, which had sales of $5.5 billion for the fiscal year that ended June 30, is the nation's second-largest food distributor.

"Its stock has been an outstanding performer," Birckhead said. "It was 38 last summer and it has jumped nearly 10 points."

Shares in U.S. Foodservice closed yesterday at $47.625, up 12.5 cents.

Pub Date: 11/03/98

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