U.S. Food seeks larger presence in the Midwest

Company to purchase Lady Baltimore Foods

September 12, 2002|By June Arney | June Arney,SUN STAFF

U.S. Foodservice officials said yesterday they will buy Lady Baltimore Foods Inc. of Kansas City, Kan. - a move that will expand the food distributor's reach in the Midwest.

"It's a transaction which we've been eyeing for sometime," said Robert Gillison, vice president and treasurer of Columbia-based U.S. Foodservice. "It really only made sense for us after the acquisition of Alliant, because Alliant has operations in Kansas and Missouri. That gave us the capability to serve Lady Baltimore customers."

U.S. Foodservice and parent company Dutch conglomerate Royal Ahold NV, completed the $2.2 billion takeover of Alliant Foodservice Inc. late last year.

Gillison declined to disclose the sales price of the Lady Baltimore deal, which he said he hopes to close within 60 days.

"It's been in many ways a family business," said Clifford A. Cohen, secretary and general counsel for Lady Baltimore. "It just got bigger but not really to the point that it could compete with the Syscos of the world or the U.S. Foodservices. A regional distributor can't even compete for national accounts."

The sale is expected to mean job losses for some of Lady Baltimore's 400 employees, because the company's 450,000-square- foot distribution facility in Kansas City, Kan., will close.

U.S. Foodservice is expected to hire about 75 Lady Baltimore employees or more, Cohen said. U.S. Foodservice also will beef up staff at distribution centers in Topeka, Kan., and Salem, Mo., to service Lady Baltimore customers, which would mean additional jobs, Gillison said.

Lady Baltimore markets and distributes more than 14,000 food items and supplies to schools, restaurants, hospitals and other customers in Kansas, Missouri, Arkansas, Oklahoma, Iowa and Nebraska. Its revenue was about $180 million in the fiscal year that ended June 2001. U.S. Foodservice is the nation's second-largest food distribution company, behind Houston-based Sysco Corp.

With more than 100 distribution centers nationwide, U.S. Foodservice supports more than 300,000 customers across the country.

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