Blackstone to buy Virginia Performance Food for $1.2 bn

BOSTON: Blackstone Group, manager of the world’s biggest buyout fund, agreed to buy food distributor Performance Food Group in a transaction valued at about $1.2 billion.

Blackstone and Wellspring Capital Management will pay $34.50 a share in cash for Richmond, Virginia-based Performance Food, the companies said on Friday in a statement. That’s 43% more than Performance Food’s closing price on Thursday in Nasdaq Stock Market trading.

The buyout firms will combine Performance Food with Vistar, a food-service distributor they own. The transaction, which must be approved by Performance Food shareholders, isn’t subject to financing conditions, according to the statement.

Blackstone and Wellspring will pay a $40 million fee if they don’t complete the purchase. The deal includes a so-called go-shop provision under which Performance Food will seek superior proposals over the next 50 days.

Evercore Group is the financial adviser to Performance Food, while Bass, Berry & Sims is its legal adviser. Wachovia, Goldman Sachs Group and Credit Suisse Group are the financial advisers for the buyers. Simpson Thacher & Bartlett is their legal adviser.