Don't tell Blackstone there is a credit crunch on. Today The Wall Street Journal reports that Performance Food Group Co. agreed to be acquired by an affiliate of the Blackstone Group and Wellspring Capital Management in a deal valued at about $1.3 billion. Performance Food will continue to look for better bids over the next 50 days.
At a time when raising debt is very expensive, Blackstone and Wellspring offered shareholders $34.50 in cash for each outstanding share they hold, a 43% premium to Thursday's closing price of $24.19. The combined efforts between Blackstone and Wellspring, via their affiliate, are perhaps why the two were able to navigate the troubled debt markets.
Performance Food will be merged with Blackstone's VISTAR Corporation, a Denver-based food distributor, which the private equity firm took a controlling stake in sometime in July 2007 for $421 million. Blackstone also owns other companies in the food business, including Pinnacle Foods ($2.27 billion), United Biscuits ($3.19 billion), Tragus (£2.71 billion), and Orangina SAS ($2.30 billion).
Evercore Group L.L.C. is acting as financial advisor and Bass, Berry & Sims PLC is acting as legal advisor to Performance Food. Wachovia, Goldman Sachs, and Credit Suisse are acting as financial advisors and Simpson Thacher & Bartlett LLP is acting as legal advisor to Blackstone and Wellspring.