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Form 425 Core-Mark Holding Compan Filed by: Performance Food Group Co

May 18, 2021 4:56 PM EDT

FILED BY PERFORMANCE FOOD GROUP COMPANY

PURSUANT TO RULE 425 UNDER THE SECURITIES ACT OF 1933

AND DEEMED FILED PURSUANT TO RULE 14a-12

UNDER THE SECURITIES EXCHANGE ACT OF 1934

SUBJECT COMPANY: CORE-MARK HOLDING COMPANY, INC.

COMMISSION FILE NO. 000-51515

Performance Food Group Company (“PFG”) distributed the materials in this filing to certain of its employees on May 18, 2021, in connection with PFG’s pending acquisition of Core-Mark Holding Company, Inc.

Forward-Looking Statements

This communication contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include, but are not limited to, statements related to our expectations regarding the performance of our business, our financial results, our liquidity and capital resources, and other non-historical statements. You can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words.

Such forward-looking statements are subject to various risks and uncertainties. The following factors, in addition to those discussed under the section entitled Item 1A. Risk Factors in the PFG’s Annual Report on Form 10-K for the fiscal year ended June 27, 2020 filed with the Securities and Exchange Commission (the “SEC”) on August 18, 2020, as such factors may be updated from time to time in our periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov, could cause actual future results to differ materially from those expressed in any forward-looking statements:

 

   

integration of our acquisition of Reinhart;

 

   

the material adverse impact the COVID-19 pandemic has had and is expected to continue to have on the global markets, the restaurant industry, and our business specifically;

 

   

competition in our industry is intense, and we may not be able to compete successfully;

 

   

we operate in a low margin industry, which could increase the volatility of our results of operations;

 

   

we may not realize anticipated benefits from our operating cost reduction and productivity improvement efforts;

 

   

our profitability is directly affected by cost inflation and deflation and other factors;

 

   

we do not have long-term contracts with certain of our customers;

 

   

group purchasing organizations may become more active in our industry and increase their efforts to add our customers as members of these organizations;

 

   

changes in eating habits of consumers;

 

   

extreme weather conditions;

 

   

our reliance on third-party suppliers;

 

   

labor relations and cost risks and availability of qualified labor;

 

   

volatility of fuel and other transportation costs;

 

   

inability to adjust cost structure where one or more of our competitors successfully implement lower costs;

 

   

we may be unable to increase our sales in the highest margin portion of our business;

 

   

changes in pricing practices of our suppliers;

 

   

our growth strategy may not achieve the anticipated results;

 

   

risks relating to acquisitions, including the risk that we are not able to realize benefits of acquisitions or successfully integrate the businesses we acquire;

 

   

environmental, health, and safety costs;

 

   

the risk that we fail to comply with requirements imposed by applicable law or government regulations;


   

a portion of our sales volume is dependent upon the distribution of cigarettes and other tobacco products, sales of which are generally declining;

 

   

if the products we distribute are alleged to cause injury or illness or fail to comply with governmental regulations, we may need to recall our products and may experience product liability claims;

 

   

our reliance on technology and risks associated with disruption or delay in implementation of new technology;

 

   

costs and risks associated with a potential cybersecurity incident or other technology disruption;

 

   

product liability claims relating to the products we distribute and other litigation;

 

   

adverse judgements or settlements;

 

   

negative media exposure and other events that damage our reputation;

 

   

decrease in earnings from amortization charges associated with acquisitions;

 

   

impact of uncollectibility of accounts receivable;

 

   

difficult economic conditions affecting consumer confidence;

 

   

risks relating to federal, state, and local tax rules;

 

   

the cost and adequacy of insurance coverage;

 

   

risks relating to our outstanding indebtedness;

 

   

our ability to raise additional capital;

 

   

our ability to maintain an effective system of disclosure controls and internal control over financial reporting;

 

   

the possibility that the expected synergies and value creation from the acquisition of Reinhart will not be realized or will not be realized within the expected time period; and

 

   

the following risks related to the proposed acquisition of Core-Mark ( the “Core-Mark Transaction”):

 

   

the risk that U.S. federal antitrust clearance or other approvals required for the Core-Mark Transaction may be delayed or not obtained or are obtained subject to conditions that are not anticipated that could require the exertion of management’s time and PFG’s resources or otherwise have an adverse effect on PFG;

 

   

the possibility that conditions to the consummation of the Core-Mark Transaction, including approval by Core-Mark shareholders, will not be satisfied or completed on a timely basis and accordingly the Core-Mark Transaction may not be consummated on a timely basis or at all;

 

   

uncertainty as to the expected financial performance of the combined company following completion of the Core-Mark Transaction;

 

   

the possibility that the expected synergies and value creation from the Core-Mark Transaction will not be realized or will not be realized within the expected time period;

 

   

the exertion of PFG management’s time and PFG’s resources, and other expenses incurred and business changes required, in connection with complying with the undertakings in connection with U.S. federal antitrust clearance or other third-party consents or approvals for the Core-Mark Transaction;

 

   

the risk that unexpected costs will be incurred in connection with the completion and/or integration of the Core-Mark Transaction or that the integration of Core-Mark will be more difficult or time consuming than expected;

 

   

availability of debt financing for the Core-Mark Transaction and our refinancing plans on terms that are favorable to us;

 

   

a downgrade of the credit rating of PFG’s indebtedness, which could give rise to an obligation to redeem existing indebtedness;

 

   

potential litigation in connection with the Core-Mark Transaction may affect the timing or occurrence of the Core-Mark Transaction or result in significant costs of defense, indemnification and liability;

 

   

the inability to retain key personnel;

 

   

the possibility that competing offers will be made to acquire Core-Mark;


   

disruption from the announcement, pendency and/or completion of the Core-Mark Transaction, including potential adverse reactions or changes to business relationships with customers, employees, suppliers or regulators, making it more difficult to maintain business and operational relationships; and

 

   

the risk that, following the Core-Mark Transaction, the combined company may not be able to effectively manage its expanded operations.

Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release and in our filings with the SEC. Any forward-looking statement, including any contained herein, speaks only as of the time of this release or as of the date they were made and we do not undertake to update or revise them as more information becomes available or to disclose any facts, events, or circumstances after the date of this release or our statement, as applicable, that may affect the accuracy of any forward-looking statement, except as required by law.

Important Additional Information and Where to Find It

In connection with the proposed transaction, PFG intends to file with the SEC a registration statement on Form S-4 (the “Registration Statement”), which will include a prospectus with respect to the shares of PFG’s common stock to be issued in the proposed transaction and a proxy statement for Core-Mark’s stockholders (the “Proxy Statement”). Core-Mark will send the Proxy Statement to its stockholders, and each party may file other documents regarding the proposed transaction with the SEC. This communication is not a substitute for the Form S-4, the Proxy Statement or any other document that Core-Mark may send to its stockholders in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF PFG AND CORE-MARK ARE URGED TO READ THE FORM S-4, THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) THAT WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT PFG, CORE-MARK, THE PROPOSED TRANSACTION AND RELATED MATTERS. Investors and security holders of PFG and Core-Mark will be able to obtain free copies of the Form S-4, the Proxy Statement and other documents (including any amendments or supplements thereto) containing important information about PFG and Core-Mark once those documents are filed with the SEC, through the website maintained by the SEC at www.sec.gov. Copies of the documents filed with the SEC by PFG will be available free of charge on PFG’s website at www.investors.pfgc.com or by contacting PFG’s Investor Relations department at [email protected]. Copies of the documents filed with the SEC by Core-Mark will be available free of charge on Core-Mark’s website at ir.core-mark.com/investors or by contacting Core-Mark’s Investor Relations department at [email protected].

Participants In The Solicitation

PFG and its directors, executive officers and employees may be deemed to be participants in the solicitation of proxies from the stockholders of Core-Mark in connection with the proposed transaction.

Information about the directors and executive officers of PFG is set forth in its (i) Form 10-K for the fiscal year ended June 27, 2020, which was filed with the SEC on August 18, 2020 and (ii) proxy statement for its 2020 annual meeting of stockholders, which was filed with the SEC on October 9, 2020, and on its website at www.pfgc.com.

Investors may obtain additional information regarding the interest of such participants by reading the Form S-4, the Proxy Statement and other materials to be filed with the SEC in connection with proposed transaction when they become available.

No Offer or Solicitation

This communication is for informational purposes only and does not constitute, or form a part of, an offer to sell or the solicitation of an offer to sell or an offer to buy or the solicitation of an offer to buy any securities, and there shall be no sale of securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, and otherwise in accordance with applicable law.

* * *


Subject: PFG Announces Acquisition of Core-Mark

 

LOGO

A Message from George Holm, PFG Chairman, President & CEO

Today we announced that Performance Food Group signed a definitive agreement to acquire Core-Mark, one of North America’s largest marketers of food, fresh and broadline supply solutions to the convenience retail industry. I am very excited about our company’s continuing expansion and adding the many strengths Core-Mark will bring to our business.

The acquisition is a stock and cash transaction, valuing Core-Mark at approximately $2.5 billion, including Core-Mark’s net debt. It will add approximately $17 billion to net sales, resulting in total PFG pro-forma net sales of approximately $44 billion. For the first time, we will be expanding our business beyond U.S. borders. Core-Mark services about 40,000 customer locations in all 50 states and in five Canadian provinces and two Canadian territories from 32 distribution centers.

Pat Hagerty, Vistar’s CEO, will welcome Core-Mark into PFG’s Vistar operating segment, building on the valuable experience we already have in this space after adding Eby-Brown to our family of companies in 2019. Thanks to Eby-Brown President Tom Wake and his dedicated team, PFG’s entry into the channel has been successful, and we’re ready to keep growing. We’ve found success with our brands and foodservice expertise in the convenience channel with Eby, and the addition of Core-Mark will offer even more opportunities for this type of collaboration in the prepared/made-to-order foodservice market.

When PFG looks at opportunities, the cultural fit is always a key factor in our decision. I am impressed with Core-Mark’s experienced senior leadership team and how its 7,500 highly-skilled associates bring to life a strong customer-centric philosophy and commitment to customer success – just like you do.

The transaction will create a best-in-class convenience business within PFG’s Vistar segment that will include the Core-Mark and Eby-Brown businesses. The expanded convenience business will operate under the Core-Mark brand and will be headquartered in Westlake, Texas, with Eby-Brown maintaining ongoing operations in Naperville. Core-Mark’s Scott McPherson will continue as President and Chief Executive Officer of Core-Mark, following closing of the transaction. Tom will continue as President and CEO of Eby-Brown, reporting to Scott.

Founded more than 130 years ago, Core-Mark offers a full range of products, marketing programs and technology solutions. It services traditional convenience retailers, grocers, drug stores, mass merchants, liquor and specialty stores, and other stores that carry convenience products. Core-Mark is excited about innovation possibilities we can bring to the convenience industry together and the wider range of products our customers will have access to, particularly in the fresh food space. We are too.

This transaction combines Core-Mark’s scale and operational excellence with PFG’s strength and capabilities in convenience and foodservice. We expect it to close in the first half of calendar 2022, subject to U.S. federal antitrust clearance, Core-Mark shareholder approval and other customary closing conditions.

PFG is positioned to take advantage of growth opportunities like this because of your valued contributions every day. Thank you for all you do!

Best,

 

LOGO

You can find more details in our news release and will hear more as we work toward closing.


Forward-Looking Statements

This communication contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include, but are not limited to, statements related to our expectations regarding the performance of our business, our financial results, our liquidity and capital resources, integration of our acquisition of Reinhart and other non-historical statements. You can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words.

Such forward-looking statements are subject to various risks and uncertainties. The following factors, in addition to those discussed under the section entitled Item 1A. Risk Factors in the PFG’s Annual Report on Form 10-K for the fiscal year ended June 27, 2020 filed with the Securities and Exchange Commission (the “SEC”) on August 18, 2020, as such factors may be updated from time to time in our periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov, could cause actual future results to differ materially from those expressed in any forward-looking statements:

 

   

the material adverse impact the COVID-19 pandemic has had and is expected to continue to have on the global markets, the restaurant industry, and our business specifically;

 

   

competition in our industry is intense, and we may not be able to compete successfully;

 

   

we operate in a low margin industry, which could increase the volatility of our results of operations;

 

   

we may not realize anticipated benefits from our operating cost reduction and productivity improvement efforts;

 

   

our profitability is directly affected by cost inflation and deflation and other factors;

 

   

we do not have long-term contracts with certain of our customers;

 

   

group purchasing organizations may become more active in our industry and increase their efforts to add our customers as members of these organizations;

 

   

changes in eating habits of consumers;

 

   

extreme weather conditions;

 

   

our reliance on third-party suppliers;

 

   

labor relations and cost risks and availability of qualified labor;

 

   

volatility of fuel and other transportation costs;

 

   

inability to adjust cost structure where one or more of our competitors successfully implement lower costs;

 

   

we may be unable to increase our sales in the highest margin portion of our business;

 

   

changes in pricing practices of our suppliers;

 

   

our growth strategy may not achieve the anticipated results;

 

   

risks relating to acquisitions, including the risk that we are not able to realize benefits of acquisitions or successfully integrate the businesses we acquire;

 

   

environmental, health, and safety costs;

 

   

the risk that we fail to comply with requirements imposed by applicable law or government regulations;

 

   

a portion of our sales volume is dependent upon the distribution of cigarettes and other tobacco products, sales of which are generally declining;

 

   

if the products we distribute are alleged to cause injury or illness or fail to comply with governmental regulations, we may need to recall our products and may experience product liability claims;

 

   

our reliance on technology and risks associated with disruption or delay in implementation of new technology;

 

   

costs and risks associated with a potential cybersecurity incident or other technology disruption;

 

   

product liability claims relating to the products we distribute and other litigation;

 

   

adverse judgements or settlements;

 

   

negative media exposure and other events that damage our reputation;

 

   

decrease in earnings from amortization charges associated with acquisitions;

 

   

impact of uncollectibility of accounts receivable;

 

   

difficult economic conditions affecting consumer confidence;

 

   

risks relating to federal, state, and local tax rules;

 

   

the cost and adequacy of insurance coverage;

 

   

risks relating to our outstanding indebtedness;

 

   

our ability to raise additional capital;

 

   

our ability to maintain an effective system of disclosure controls and internal control over financial reporting;

 

   

the possibility that the expected synergies and value creation from the acquisition of Reinhart will not be realized or will not be realized within the expected time period; and

 

   

the following risks related to the proposed acquisition of Core-Mark ( the “Core-Mark Transaction”):

 

   

the risk that U.S. federal antitrust clearance or other approvals required for the Core-Mark Transaction may be delayed or not obtained or are obtained subject to conditions that are not anticipated that could require the exertion of management’s time and PFG’s resources or otherwise have an adverse effect on PFG;

 

   

the possibility that conditions to the consummation of the Core-Mark Transaction, including approval by Core-Mark shareholders, will not be satisfied or completed on a timely basis and accordingly the Core-Mark Transaction may not be consummated on a timely basis or at all;

 

   

uncertainty as to the expected financial performance of the combined company following completion of the Core-Mark Transaction;

 

   

the possibility that the expected synergies and value creation from the Core-Mark Transaction will not be realized or will not be realized within the expected time period;

 

   

the exertion of PFG management’s time and PFG’s resources, and other expenses incurred and business changes required, in connection with complying with the undertakings in connection with U.S. federal antitrust clearance or other third-party consents or approvals for the Core-Mark Transaction;

 

   

the risk that unexpected costs will be incurred in connection with the completion and/or integration of the Core-Mark Transaction or that the integration of Core-Mark will be more difficult or time consuming than expected;

 

   

availability of debt financing for the Core-Mark Transaction and our refinancing plans on terms that are favorable to us;

 

   

a downgrade of the credit rating of PFG’s indebtedness, which could give rise to an obligation to redeem existing indebtedness;

 

   

potential litigation in connection with the Core-Mark Transaction may affect the timing or occurrence of the Core-Mark Transaction or result in significant costs of defense, indemnification and liability;

 

   

the inability to retain key personnel;

 

   

the possibility that competing offers will be made to acquire Core-Mark;

 

   

disruption from the announcement, pendency and/or completion of the Core-Mark Transaction, including potential adverse reactions or changes to business relationships with customers, employees, suppliers or regulators, making it more difficult to maintain business and operational relationships; and

 

   

the risk that, following the Core-Mark Transaction, the combined company may not be able to effectively manage its expanded operations.

Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release and in our filings with the SEC. Any forward-looking statement, including any contained herein, speaks only as of the time of this release or as of the date they were made and we do not undertake to update or revise them as more information becomes available or to disclose any facts, events, or circumstances after the date of this release or our statement, as applicable, that may affect the accuracy of any forward-looking statement, except as required by law.

Important Additional Information and Where to Find It

In connection with the proposed transaction, PFG intends to file with the SEC a registration statement on Form S-4 (the “Registration Statement”), which will include a prospectus with respect to the shares of PFG’s common stock to be issued in the proposed transaction and a proxy statement for Core-Mark’s stockholders (the “Proxy Statement”). Core-Mark will send the Proxy Statement to its stockholders, and each party may file other documents regarding the proposed transaction with the SEC. This communication is not a substitute for the Form S-4, the Proxy Statement or any other document that Core-Mark may send to its stockholders in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF PFG AND CORE-MARK ARE URGED TO READ THE FORM S-4, THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) THAT WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT PFG, CORE-MARK, THE PROPOSED TRANSACTION AND RELATED MATTERS. Investors and security holders of PFG and Core-Mark will be able to obtain free copies of the Form S-4, the Proxy Statement and other documents (including any amendments or supplements thereto) containing important information about PFG and Core-Mark once those documents are filed with the SEC, through the website maintained by the SEC at www.sec.gov. Copies of the documents filed with the SEC by PFG will be available free of charge on PFG’s website at www.investors.pfgc.com or by contacting PFG’s Investor Relations department at [email protected]. Copies of the documents filed with the SEC by Core-Mark will be available free of charge on Core-Mark’s website at ir.core-mark.com/investors or by contacting Core-Mark’s Investor Relations department at [email protected].

 


Participants In The Solicitation

PFG and its directors, executive officers and employees may be deemed to be participants in the solicitation of proxies from the stockholders of Core-Mark in connection with the proposed transaction.

Information about the directors and executive officers of PFG is set forth in its (i) Form 10-K for the fiscal year ended June 27, 2020, which was filed with the SEC on August 18, 2020 and (ii) proxy statement for its 2020 annual meeting of stockholders, which was filed with the SEC on October 9, 2020, and on its website at www.pfgc.com.

Investors may obtain additional information regarding the interest of such participants by reading the Form S-4, the Proxy Statement and other materials to be filed with the SEC in connection with proposed transaction when they become available.

No Offer or Solicitation

This communication is for informational purposes only and does not constitute, or form a part of, an offer to sell or the solicitation of an offer to sell or an offer to buy or the solicitation of an offer to buy any securities, and there shall be no sale of securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, and otherwise in accordance with applicable law.


Subject: A Message for Eby-Brown and Vistar Associates on Core-Mark Acquisition

 

LOGO

A Message from Pat Hagerty, PFG EVP and Vistar CEO

Today we announced that Performance Food Group signed a definitive agreement to acquire Core-Mark. Within the convenience industry, they are well known as one of North America’s largest marketers of food, fresh and broadline supply solutions, and I’m sure a familiar name to many of you. Today’s announcement is about bringing together the best talent in convenience!

Thanks to the success you’ve helped PFG achieve in the convenience channel over the past few years under Tom Wake’s leadership, we are well positioned to keep expanding in this space. Tom and I are both excited about the complementary strengths Core-Mark will bring and the expansion opportunities for our combined businesses, including crossing into Canada and becoming a North American distributor.

We’ve found success with our brands and foodservice expertise in the convenience channel through Eby, and the addition of Core-Mark will offer even more opportunities for this type of collaboration in the prepared/made-to-order foodservice market. We are both excited about the innovation possibilities!

You have been through a change like this yourself, and today’s announcement may bring back some of the uncertainty or concern you felt when PFG acquired Eby-Brown. We are committed to sharing information with you along the way. We don’t have all the answers today. As we did with Eby, we’ll learn as we go through the process and that will inform or even change some of our initial thoughts on how Core-Mark and Eby can best work together to serve our valued customers.

The transaction will create a best-in-class convenience business within PFG’s Vistar segment that will include the Core-Mark and Eby-Brown businesses. The expanded convenience business will operate under the Core-Mark brand and will be headquartered in Westlake, Texas, with Eby-Brown maintaining ongoing operations in Naperville. Scott McPherson will continue as President and Chief Executive Officer of Core-Mark, following closing of the transaction. Tom will continue as President and Chief Executive Officer of Eby-Brown, reporting to Scott.

When we look at potential acquisitions, cultural fit is a key factor for in our decision-making process. Eby had that and so does Core-Mark. We’re pleased to bring together such strong, complementary businesses and highly skilled associates as part of PFG’s Vistar operating segment. We appreciate your support as we focus on closing this transaction and then on a seamless integration for our business and customers.

It’s important to keep in mind that Eby-Brown and Core-Mark remain two separate businesses until the transaction closes. Please stay focused on business as usual and serving our customers.

Let’s celebrate this step forward today – thanks to the success you’ve helped PFG achieve! You’ll be hearing more from me and Tom as we work to make progress on closing this transaction.

My Best,

 

LOGO

 

Performance Food Group   
May 18, 2021   


Forward-Looking Statements

This communication contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include, but are not limited to, statements related to our expectations regarding the performance of our business, our financial results, our liquidity and capital resources, integration of our acquisition of Reinhart and other non-historical statements. You can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words.

Such forward-looking statements are subject to various risks and uncertainties. The following factors, in addition to those discussed under the section entitled Item 1A. Risk Factors in the PFG’s Annual Report on Form 10-K for the fiscal year ended June 27, 2020 filed with the Securities and Exchange Commission (the “SEC”) on August 18, 2020, as such factors may be updated from time to time in our periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov, could cause actual future results to differ materially from those expressed in any forward-looking statements:

 

   

the material adverse impact the COVID-19 pandemic has had and is expected to continue to have on the global markets, the restaurant industry, and our business specifically;

 

   

competition in our industry is intense, and we may not be able to compete successfully;

 

   

we operate in a low margin industry, which could increase the volatility of our results of operations;

 

   

we may not realize anticipated benefits from our operating cost reduction and productivity improvement efforts;

 

   

our profitability is directly affected by cost inflation and deflation and other factors;

 

   

we do not have long-term contracts with certain of our customers;

 

   

group purchasing organizations may become more active in our industry and increase their efforts to add our customers as members of these organizations;

 

   

changes in eating habits of consumers;

 

   

extreme weather conditions;

 

   

our reliance on third-party suppliers;

 

   

labor relations and cost risks and availability of qualified labor;

 

   

volatility of fuel and other transportation costs;

 

   

inability to adjust cost structure where one or more of our competitors successfully implement lower costs;

 

   

we may be unable to increase our sales in the highest margin portion of our business;

 

   

changes in pricing practices of our suppliers;

 

   

our growth strategy may not achieve the anticipated results;

 

   

risks relating to acquisitions, including the risk that we are not able to realize benefits of acquisitions or successfully integrate the businesses we acquire;

 

   

environmental, health, and safety costs;

 

   

the risk that we fail to comply with requirements imposed by applicable law or government regulations;

 

   

a portion of our sales volume is dependent upon the distribution of cigarettes and other tobacco products, sales of which are generally declining;

 

   

if the products we distribute are alleged to cause injury or illness or fail to comply with governmental regulations, we may need to recall our products and may experience product liability claims;

 

   

our reliance on technology and risks associated with disruption or delay in implementation of new technology;

 

   

costs and risks associated with a potential cybersecurity incident or other technology disruption;

 

   

product liability claims relating to the products we distribute and other litigation;

 

   

adverse judgements or settlements;

 

   

negative media exposure and other events that damage our reputation;

 

   

decrease in earnings from amortization charges associated with acquisitions;

 

   

impact of uncollectibility of accounts receivable;

 

   

difficult economic conditions affecting consumer confidence;

 

   

risks relating to federal, state, and local tax rules;

 

   

the cost and adequacy of insurance coverage;

 

   

risks relating to our outstanding indebtedness;

 

   

our ability to raise additional capital;

 

   

our ability to maintain an effective system of disclosure controls and internal control over financial reporting;

 

   

the possibility that the expected synergies and value creation from the acquisition of Reinhart will not be realized or will not be realized within the expected time period; and

 

   

the following risks related to the proposed acquisition of Core-Mark ( the “Core-Mark Transaction”):

 

   

the risk that U.S. federal antitrust clearance or other approvals required for the Core-Mark Transaction may be delayed or not obtained or are obtained subject to conditions that are not anticipated that could require the exertion of management’s time and PFG’s resources or otherwise have an adverse effect on PFG;

 

   

the possibility that conditions to the consummation of the Core-Mark Transaction, including approval by Core-Mark shareholders, will not be satisfied or completed on a timely basis and accordingly the Core-Mark Transaction may not be consummated on a timely basis or at all;

 

   

uncertainty as to the expected financial performance of the combined company following completion of the Core-Mark Transaction;

 

   

the possibility that the expected synergies and value creation from the Core-Mark Transaction will not be realized or will not be realized within the expected time period;


   

the exertion of PFG management’s time and PFG’s resources, and other expenses incurred and business changes required, in connection with complying with the undertakings in connection with U.S. federal antitrust clearance or other third-party consents or approvals for the Core-Mark Transaction;

 

   

the risk that unexpected costs will be incurred in connection with the completion and/or integration of the Core-Mark Transaction or that the integration of Core-Mark will be more difficult or time consuming than expected;

 

   

availability of debt financing for the Core-Mark Transaction and our refinancing plans on terms that are favorable to us;

 

   

a downgrade of the credit rating of PFG’s indebtedness, which could give rise to an obligation to redeem existing indebtedness;

 

   

potential litigation in connection with the Core-Mark Transaction may affect the timing or occurrence of the Core-Mark Transaction or result in significant costs of defense, indemnification and liability;

 

   

the inability to retain key personnel;

 

   

the possibility that competing offers will be made to acquire Core-Mark;

 

   

disruption from the announcement, pendency and/or completion of the Core-Mark Transaction, including potential adverse reactions or changes to business relationships with customers, employees, suppliers or regulators, making it more difficult to maintain business and operational relationships; and

 

   

the risk that, following the Core-Mark Transaction, the combined company may not be able to effectively manage its expanded operations.

Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release and in our filings with the SEC. Any forward-looking statement, including any contained herein, speaks only as of the time of this release or as of the date they were made and we do not undertake to update or revise them as more information becomes available or to disclose any facts, events, or circumstances after the date of this release or our statement, as applicable, that may affect the accuracy of any forward-looking statement, except as required by law.

Important Additional Information and Where to Find It

In connection with the proposed transaction, PFG intends to file with the SEC a registration statement on Form S-4 (the “Registration Statement”), which will include a prospectus with respect to the shares of PFG’s common stock to be issued in the proposed transaction and a proxy statement for Core-Mark’s stockholders (the “Proxy Statement”). Core-Mark will send the Proxy Statement to its stockholders, and each party may file other documents regarding the proposed transaction with the SEC. This communication is not a substitute for the Form S-4, the Proxy Statement or any other document that Core-Mark may send to its stockholders in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF PFG AND CORE-MARK ARE URGED TO READ THE FORM S-4, THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) THAT WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT PFG, CORE-MARK, THE PROPOSED TRANSACTION AND RELATED MATTERS. Investors and security holders of PFG and Core-Mark will be able to obtain free copies of the Form S-4, the Proxy Statement and other documents (including any amendments or supplements thereto) containing important information about PFG and Core-Mark once those documents are filed with the SEC, through the website maintained by the SEC at www.sec.gov. Copies of the documents filed with the SEC by PFG will be available free of charge on PFG’s website at www.investors.pfgc.com or by contacting PFG’s Investor Relations department at [email protected]. Copies of the documents filed with the SEC by Core-Mark will be available free of charge on Core-Mark’s website at ir.core-mark.com/investors or by contacting Core-Mark’s Investor Relations department at [email protected].

Participants In The Solicitation

PFG and its directors, executive officers and employees may be deemed to be participants in the solicitation of proxies from the stockholders of Core-Mark in connection with the proposed transaction.

Information about the directors and executive officers of PFG is set forth in its (i) Form 10-K for the fiscal year ended June 27, 2020, which was filed with the SEC on August 18, 2020 and (ii) proxy statement for its 2020 annual meeting of stockholders, which was filed with the SEC on October 9, 2020, and on its website at www.pfgc.com.

Investors may obtain additional information regarding the interest of such participants by reading the Form S-4, the Proxy Statement and other materials to be filed with the SEC in connection with proposed transaction when they become available.

No Offer or Solicitation

This communication is for informational purposes only and does not constitute, or form a part of, an offer to sell or the solicitation of an offer to sell or an offer to buy or the solicitation of an offer to buy any securities, and there shall be no sale of securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, and otherwise in accordance with applicable law.


Vistar and Eby Leader Update from Pat Hagerty

 

Subject: Our Business Continues to Grow

I am excited to follow up on the news PFG announced this morning – including what it means for our business. Diversification and expansion, using what we already do well in different ways and in new channels, has helped us navigate challenging times. Today’s announcement is the next step in our expansion into convenience that we started with Eby-Brown in 2019. It’s also an expanded opportunity to use PFG’s foodservice expertise in this channel.

We are excited to be bringing together the best talent in convenience through this acquisition! We share complementary customer-centric operating models with consistent go-to-market selling cultures focused on customer service. This alignment will support collaboration, innovation and continuing growth.

To help you understand more about the transaction and next steps, please review the attached talking points and share as appropriate with your teams.

 

   

Please reach out to any key customers or suppliers today to proactively share this positive news and reinforce our commitment to business as usual now, followed by a smooth transition.

 

   

An enterprise communication from George Holm highlighting key points for all PFG associates will be sent at 8 a.m. ET.

PFG expects the transaction to close in the first half of calendar 2022, subject to U.S. federal antitrust clearance, Core-Mark shareholder approval, and other customary closing conditions. Some of you or your team members may be involved in discussions and work with Core-Mark to get us to the close date. Please keep in mind that we continue to operate as separate businesses and competitors until this acquisition is complete.

As we work toward the close date, it’s important to stay focused on our business and delivering the quality service our customers expect from us. Thank you for the success you’ve delivered for PFG that has allowed us to pursue this great growth opportunity!

Forward-Looking Statements

This communication contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include, but are not limited to, statements related to our expectations regarding the performance of our business, our financial results, our liquidity and capital resources, integration of our acquisition of Reinhart and other non-historical statements. You can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words.

Such forward-looking statements are subject to various risks and uncertainties. The following factors, in addition to those discussed under the section entitled Item 1A. Risk Factors in the PFG’s Annual Report on Form 10-K for the fiscal year ended June 27, 2020 filed with the Securities and Exchange Commission (the “SEC”) on August 18, 2020, as such factors may be updated from time to time in our periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov, could cause actual future results to differ materially from those expressed in any forward-looking statements:

 

   

the material adverse impact the COVID-19 pandemic has had and is expected to continue to have on the global markets, the restaurant industry, and our business specifically;

 

   

competition in our industry is intense, and we may not be able to compete successfully;

 

   

we operate in a low margin industry, which could increase the volatility of our results of operations;

 

   

we may not realize anticipated benefits from our operating cost reduction and productivity improvement efforts;

 

   

our profitability is directly affected by cost inflation and deflation and other factors;

 

   

we do not have long-term contracts with certain of our customers;

 

   

group purchasing organizations may become more active in our industry and increase their efforts to add our customers as members of these organizations;

 

   

changes in eating habits of consumers;

 

   

extreme weather conditions;

 

   

our reliance on third-party suppliers;

 

   

labor relations and cost risks and availability of qualified labor;

 

   

volatility of fuel and other transportation costs;

 

   

inability to adjust cost structure where one or more of our competitors successfully implement lower costs;

 

   

we may be unable to increase our sales in the highest margin portion of our business;

 


   

changes in pricing practices of our suppliers;

 

   

our growth strategy may not achieve the anticipated results;

 

   

risks relating to acquisitions, including the risk that we are not able to realize benefits of acquisitions or successfully integrate the businesses we acquire;

 

   

environmental, health, and safety costs;

 

   

the risk that we fail to comply with requirements imposed by applicable law or government regulations;

 

   

a portion of our sales volume is dependent upon the distribution of cigarettes and other tobacco products, sales of which are generally declining;

 

   

if the products we distribute are alleged to cause injury or illness or fail to comply with governmental regulations, we may need to recall our products and may experience product liability claims;

 

   

our reliance on technology and risks associated with disruption or delay in implementation of new technology;

 

   

costs and risks associated with a potential cybersecurity incident or other technology disruption;

 

   

product liability claims relating to the products we distribute and other litigation;

 

   

adverse judgements or settlements;

 

   

negative media exposure and other events that damage our reputation;

 

   

decrease in earnings from amortization charges associated with acquisitions;

 

   

impact of uncollectibility of accounts receivable;

 

   

difficult economic conditions affecting consumer confidence;

 

   

risks relating to federal, state, and local tax rules;

 

   

the cost and adequacy of insurance coverage;

 

   

risks relating to our outstanding indebtedness;

 

   

our ability to raise additional capital;

 

   

our ability to maintain an effective system of disclosure controls and internal control over financial reporting;

 

   

the possibility that the expected synergies and value creation from the acquisition of Reinhart will not be realized or will not be realized within the expected time period; and

 

   

the following risks related to the proposed acquisition of Core-Mark ( the “Core-Mark Transaction”):

 

   

the risk that U.S. federal antitrust clearance or other approvals required for the Core-Mark Transaction may be delayed or not obtained or are obtained subject to conditions that are not anticipated that could require the exertion of management’s time and PFG’s resources or otherwise have an adverse effect on PFG;

 

   

the possibility that conditions to the consummation of the Core-Mark Transaction, including approval by Core-Mark shareholders, will not be satisfied or completed on a timely basis and accordingly the Core-Mark Transaction may not be consummated on a timely basis or at all;

 

   

uncertainty as to the expected financial performance of the combined company following completion of the Core-Mark Transaction;

 

   

the possibility that the expected synergies and value creation from the Core-Mark Transaction will not be realized or will not be realized within the expected time period;

 

   

the exertion of PFG management’s time and PFG’s resources, and other expenses incurred and business changes required, in connection with complying with the undertakings in connection with U.S. federal antitrust clearance or other third-party consents or approvals for the Core-Mark Transaction;

 

   

the risk that unexpected costs will be incurred in connection with the completion and/or integration of the Core-Mark Transaction or that the integration of Core-Mark will be more difficult or time consuming than expected;

 

   

availability of debt financing for the Core-Mark Transaction and our refinancing plans on terms that are favorable to us;

 

   

a downgrade of the credit rating of PFG’s indebtedness, which could give rise to an obligation to redeem existing indebtedness;

 

   

potential litigation in connection with the Core-Mark Transaction may affect the timing or occurrence of the Core-Mark Transaction or result in significant costs of defense, indemnification and liability;

 

   

the inability to retain key personnel;

 

   

the possibility that competing offers will be made to acquire Core-Mark;

 

   

disruption from the announcement, pendency and/or completion of the Core-Mark Transaction, including potential adverse reactions or changes to business relationships with customers, employees, suppliers or regulators, making it more difficult to maintain business and operational relationships; and

 

   

the risk that, following the Core-Mark Transaction, the combined company may not be able to effectively manage its expanded operations.

Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release and in our filings with the SEC. Any forward-looking statement, including any contained herein, speaks only as of the time of this release or as of the date they were made and we do not undertake to update or revise them as more information becomes available or to disclose any facts, events, or circumstances after the date of this release or our statement, as applicable, that may affect the accuracy of any forward-looking statement, except as required by law.

Important Additional Information and Where to Find It

In connection with the proposed transaction, PFG intends to file with the SEC a registration statement on Form S-4 (the “Registration Statement”), which will include a prospectus with respect to the shares of PFG’s common stock to be issued in the proposed transaction and a proxy statement for Core-Mark’s stockholders (the “Proxy Statement”). Core-Mark will send the Proxy Statement to its stockholders, and each party may file other documents regarding the proposed transaction with the SEC. This communication is not a substitute for the Form S-4, the Proxy Statement or any other document that Core-Mark may send to its stockholders in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF PFG AND CORE-MARK


ARE URGED TO READ THE FORM S-4, THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) THAT WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT PFG, CORE-MARK, THE PROPOSED TRANSACTION AND RELATED MATTERS. Investors and security holders of PFG and Core-Mark will be able to obtain free copies of the Form S-4, the Proxy Statement and other documents (including any amendments or supplements thereto) containing important information about PFG and Core-Mark once those documents are filed with the SEC, through the website maintained by the SEC at www.sec.gov. Copies of the documents filed with the SEC by PFG will be available free of charge on PFG’s website at www.investors.pfgc.com or by contacting PFG’s Investor Relations department at [email protected]. Copies of the documents filed with the SEC by Core-Mark will be available free of charge on Core-Mark’s website at ir.core-mark.com/investors or by contacting Core-Mark’s Investor Relations department at [email protected].

Participants In The Solicitation

PFG and its directors, executive officers and employees may be deemed to be participants in the solicitation of proxies from the stockholders of Core-Mark in connection with the proposed transaction.

Information about the directors and executive officers of PFG is set forth in its (i) Form 10-K for the fiscal year ended June 27, 2020, which was filed with the SEC on August 18, 2020 and (ii) proxy statement for its 2020 annual meeting of stockholders, which was filed with the SEC on October 9, 2020, and on its website at www.pfgc.com.

Investors may obtain additional information regarding the interest of such participants by reading the Form S-4, the Proxy Statement and other materials to be filed with the SEC in connection with proposed transaction when they become available.

No Offer or Solicitation

This communication is for informational purposes only and does not constitute, or form a part of, an offer to sell or the solicitation of an offer to sell or an offer to buy or the solicitation of an offer to buy any securities, and there shall be no sale of securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, and otherwise in accordance with applicable law.


Definitive Agreement Announcement Talking Points

 

For leaders and customer- and supplier-facing associates

PFG is excited to announce that we have signed a definitive agreement to acquire Core-Mark – bringing together strong leadership and the best talent in the convenience store channel to accelerate PFG’s diversification and expansion in the channel

About the Transaction

 

   

PFG has agreed to acquire Core-Mark in a stock and cash transaction, valuing Core-Mark at approximately $2.5 billion, including Core-Mark’s net debt

 

   

Both PFG’s and Core-Mark’s boards have approved the transaction, which is also subject to U.S. federal antitrust clearance, Core-Mark shareholder approval (but not PFG’s) and other customary closing conditions

 

   

Core-Mark’s highly skilled workforce and experienced senior leadership team will be valuable additions to PFG’s family of companies

 

   

The transaction combines Core-Mark’s scale and operational excellence with PFG’s strength and capabilities in convenience and foodservice

 

   

It is expected to close in the first half of calendar 2022, subject to U.S. federal antitrust clearance and other customary closing conditions

Strategic and Financial Merits

 

   

The acquisition will add approximately $17 billion to net sales, resulting in total PFG pro-forma net sales of approximately $44 billion

 

   

This transaction expands our reach outside of the U.S. into North America, with Canadian customers geographically adjacent to those we currently serve

 

   

It builds on PFG’s foodservice focus within the convenience channel, adding more customers and product offerings, particularly in the fresh food space

 

   

We expect the acquisition to be accretive to Adjusted Diluted Earnings Per Share (EPS) in the first full fiscal year following closing of the transaction, excluding expected cost synergies

 

   

We expect it to generate approximately $40 million of annual net cost synergies, achieved in the third full year following the closing of the transaction

About Core-Mark

 

   

Core-Mark is one of the largest convenience retail distributors in North America

 

   

It is a very well-run public company with strong, experienced leadership and a dedicated team of 7,500 highly-skilled employees

 

   

The company serves about 40,000 customer locations in all 50 states in the U.S. and five Canadian provinces and two Canadian territories

 

   

Core-Mark is headquartered in Westlake, Texas, and operates 32 distribution centers

Operational and Cultural Alignment

 

   

Core-Mark has a complementary customer-centric operating model with consistent go-to-market selling cultures focused on customer service

 

   

Our aligned cultures support collaboration and innovation in the convenience channel

 

   

The transaction pulls together an impressive portfolio of quality brands and enhances our attractive customer base and product offerings

 

   

It builds on Vistar’s strategic entry into the convenience space with the addition of Eby-Brown in 2019 and Eby’s ongoing success

 

   

The transaction will create a best-in-class convenience business within PFG’s Vistar segment that will include the Core-Mark and Eby-Brown businesses

 

   

The expanded convenience business will operate under the Core-Mark brand and will be headquartered in Westlake, Texas, with Eby-Brown maintaining ongoing operations in Naperville, Illinois

 

   

Core-Mark’s Scott McPherson will continue as President and CEO of Core-Mark, following closing of the transaction, and Tom Wake will continue as President and CEO of Eby-Brown, reporting to Scott.

 

Performance Food Group   
May 18, 2021    1


Commitment to Customers/Suppliers

 

   

Our commitment to our customer and supplier relationships will continue as they are today as PFG and Core-Mark work to close the acquisition

 

   

With our complementary cultures and approaches, maintaining strong customer and supplier relationships will be a priority post-close

 

   

PFG and Core-Mark are committed to a smooth transition, seamless integration and minimal disruption for our valued customers and suppliers

 

   

We are pleased to be joining forces with a company that shares PFG’s commitment to sustained corporate social responsibility efforts

Forward-Looking Statements

This communication contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include, but are not limited to, statements related to our expectations regarding the performance of our business, our financial results, our liquidity and capital resources, integration of our acquisition of Reinhart and other non-historical statements. You can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words.

Such forward-looking statements are subject to various risks and uncertainties. The following factors, in addition to those discussed under the section entitled Item 1A. Risk Factors in the PFG’s Annual Report on Form 10-K for the fiscal year ended June 27, 2020 filed with the Securities and Exchange Commission (the “SEC”) on August 18, 2020, as such factors may be updated from time to time in our periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov, could cause actual future results to differ materially from those expressed in any forward-looking statements:

 

   

the material adverse impact the COVID-19 pandemic has had and is expected to continue to have on the global markets, the restaurant industry, and our business specifically;

 

   

competition in our industry is intense, and we may not be able to compete successfully;

 

   

we operate in a low margin industry, which could increase the volatility of our results of operations;

 

   

we may not realize anticipated benefits from our operating cost reduction and productivity improvement efforts;

 

   

our profitability is directly affected by cost inflation and deflation and other factors;

 

   

we do not have long-term contracts with certain of our customers;

 

   

group purchasing organizations may become more active in our industry and increase their efforts to add our customers as members of these organizations;

 

   

changes in eating habits of consumers;

 

   

extreme weather conditions;

 

   

our reliance on third-party suppliers;

 

   

labor relations and cost risks and availability of qualified labor;

 

   

volatility of fuel and other transportation costs;

 

   

inability to adjust cost structure where one or more of our competitors successfully implement lower costs;

 

   

we may be unable to increase our sales in the highest margin portion of our business;

 

   

changes in pricing practices of our suppliers;

 

   

our growth strategy may not achieve the anticipated results;

 

   

risks relating to acquisitions, including the risk that we are not able to realize benefits of acquisitions or successfully integrate the businesses we acquire;

 

   

environmental, health, and safety costs;

 

   

the risk that we fail to comply with requirements imposed by applicable law or government regulations;

 

   

a portion of our sales volume is dependent upon the distribution of cigarettes and other tobacco products, sales of which are generally declining;

 

   

if the products we distribute are alleged to cause injury or illness or fail to comply with governmental regulations, we may need to recall our products and may experience product liability claims;

 

   

our reliance on technology and risks associated with disruption or delay in implementation of new technology;

 

   

costs and risks associated with a potential cybersecurity incident or other technology disruption;

 

   

product liability claims relating to the products we distribute and other litigation;

 

   

adverse judgements or settlements;

 

   

negative media exposure and other events that damage our reputation;

 

   

decrease in earnings from amortization charges associated with acquisitions;

 

   

impact of uncollectibility of accounts receivable;

 

   

difficult economic conditions affecting consumer confidence;

 

   

risks relating to federal, state, and local tax rules;

 

   

the cost and adequacy of insurance coverage;

 

   

risks relating to our outstanding indebtedness;

 

   

our ability to raise additional capital;

 

   

our ability to maintain an effective system of disclosure controls and internal control over financial reporting;

 

   

the possibility that the expected synergies and value creation from the acquisition of Reinhart will not be realized or will not be realized within the expected time period; and

 

   

the following risks related to the proposed acquisition of Core-Mark ( the “Core-Mark Transaction”):

 

   

the risk that U.S. federal antitrust clearance or other approvals required for the Core-Mark Transaction may be delayed or not obtained or are obtained subject to conditions that are not anticipated that could require the exertion of management’s time and PFG’s resources or otherwise have an adverse effect on PFG;


   

the possibility that conditions to the consummation of the Core-Mark Transaction, including approval by Core-Mark shareholders, will not be satisfied or completed on a timely basis and accordingly the Core-Mark Transaction may not be consummated on a timely basis or at all;

 

   

uncertainty as to the expected financial performance of the combined company following completion of the Core-Mark Transaction;

 

   

the possibility that the expected synergies and value creation from the Core-Mark Transaction will not be realized or will not be realized within the expected time period;

 

   

the exertion of PFG management’s time and PFG’s resources, and other expenses incurred and business changes required, in connection with complying with the undertakings in connection with U.S. federal antitrust clearance or other third-party consents or approvals for the Core-Mark Transaction;

 

   

the risk that unexpected costs will be incurred in connection with the completion and/or integration of the Core-Mark Transaction or that the integration of Core-Mark will be more difficult or time consuming than expected;

 

   

availability of debt financing for the Core-Mark Transaction and our refinancing plans on terms that are favorable to us;

 

   

a downgrade of the credit rating of PFG’s indebtedness, which could give rise to an obligation to redeem existing indebtedness;

 

   

potential litigation in connection with the Core-Mark Transaction may affect the timing or occurrence of the Core-Mark Transaction or result in significant costs of defense, indemnification and liability;

 

   

the inability to retain key personnel;

 

   

the possibility that competing offers will be made to acquire Core-Mark;

 

   

disruption from the announcement, pendency and/or completion of the Core-Mark Transaction, including potential adverse reactions or changes to business relationships with customers, employees, suppliers or regulators, making it more difficult to maintain business and operational relationships; and

 

   

the risk that, following the Core-Mark Transaction, the combined company may not be able to effectively manage its expanded operations.

Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release and in our filings with the SEC. Any forward-looking statement, including any contained herein, speaks only as of the time of this release or as of the date they were made and we do not undertake to update or revise them as more information becomes available or to disclose any facts, events, or circumstances after the date of this release or our statement, as applicable, that may affect the accuracy of any forward-looking statement, except as required by law.

Important Additional Information and Where to Find It

In connection with the proposed transaction, PFG intends to file with the SEC a registration statement on Form S-4 (the “Registration Statement”), which will include a prospectus with respect to the shares of PFG’s common stock to be issued in the proposed transaction and a proxy statement for Core-Mark’s stockholders (the “Proxy Statement”). Core-Mark will send the Proxy Statement to its stockholders, and each party may file other documents regarding the proposed transaction with the SEC. This communication is not a substitute for the Form S-4, the Proxy Statement or any other document that Core-Mark may send to its stockholders in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF PFG AND CORE-MARK ARE URGED TO READ THE FORM S-4, THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) THAT WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT PFG, CORE-MARK, THE PROPOSED TRANSACTION AND RELATED MATTERS. Investors and security holders of PFG and Core-Mark will be able to obtain free copies of the Form S-4, the Proxy Statement and other documents (including any amendments or supplements thereto) containing important information about PFG and Core-Mark once those documents are filed with the SEC, through the website maintained by the SEC at www.sec.gov. Copies of the documents filed with the SEC by PFG will be available free of charge on PFG’s website at www.investors.pfgc.com or by contacting PFG’s Investor Relations department at [email protected]. Copies of the documents filed with the SEC by Core-Mark will be available free of charge on Core-Mark’s website at ir.core-mark.com/investors or by contacting Core-Mark’s Investor Relations department at [email protected].

Participants In The Solicitation

PFG and its directors, executive officers and employees may be deemed to be participants in the solicitation of proxies from the stockholders of Core-Mark in connection with the proposed transaction.

Information about the directors and executive officers of PFG is set forth in its (i) Form 10-K for the fiscal year ended June 27, 2020, which was filed with the SEC on August 18, 2020 and (ii) proxy statement for its 2020 annual meeting of stockholders, which was filed with the SEC on October 9, 2020, and on its website at www.pfgc.com.

Investors may obtain additional information regarding the interest of such participants by reading the Form S-4, the Proxy Statement and other materials to be filed with the SEC in connection with proposed transaction when they become available.

No Offer or Solicitation

This communication is for informational purposes only and does not constitute, or form a part of, an offer to sell or the solicitation of an offer to sell or an offer to buy or the solicitation of an offer to buy any securities, and there shall be no sale of securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, and otherwise in accordance with applicable law.


General Talking Points for Eby-Brown Leaders

 

 

   

Through the agreement to acquire Core-Mark, we will bring together strong leadership and the best talent in the convenience store channel to accelerate PFG’s diversification and expansion in the channel

 

   

Today’s announcement is the first step in an extended process to get to closing. The transaction is subject to U.S. federal antitrust clearance, Core-Mark shareholder approval, and other customary closing conditions. We expect to close the transaction by the first half of calendar 2022.

 

   

It’s important to stay focused on business as usual throughout this process and to remember that we remain competitors and separate businesses until the transaction is approved and we publicly announce the closing.

 

   

We expect to deliver the service that Eby-Brown is known for and will continue to support you with the resources you need as we work through this change and current labor challenges in our industry.

 

   

We’re excited to be bringing together the best talent in convenience when the transaction closes. Unless specifically requested by senior leadership to support the closing of the transaction, PFG associates should not engage with Core-Mark until the transaction is closed.

 

   

At this early stage in the acquisition process, we do not have answer to questions related to future organizational structure.

 

   

The transaction will create a best-in-class convenience business within PFG’s Vistar segment that will include the Core-Mark and Eby-Brown businesses.

 

   

The expanded convenience business will operate under the Core-Mark brand and will be headquartered in Westlake, Texas, with Eby-Brown maintaining ongoing operations in Naperville. Core-Mark’s Scott McPherson will continue as President and CEO of Core-Mark, following closing of the transaction. Tom Wake will continue as President and CEO of Eby-Brown, reporting to Scott.

Additional Points for Sales Associates

 

   

Core-Mark has a complementary customer-centric operating model with consistent go-to-market selling cultures focused on customer service

 

   

Our aligned cultures support collaboration and innovation in the convenience channel

 

   

With the completion of this transaction, we will expand our reach outside of the U.S. into North America, with Canadian customers geographically adjacent to those we currently serve

 

   

We’ll also build on PFG’s foodservice focus within the convenience channel, adding more customers and product offerings, particularly in the fresh food space

 

   

It’s important to stay focused on business as usual throughout this process and to remember that we remain competitors and separate businesses until the transaction is approved and we publicly announce the closing.

 

   

We will expect you to service your accounts in the manner that they expect from Eby.

Additional Points for Customers

 

   

PFG and Eby value our customer relationships. We are committed to communicating relevant updates as appropriate as we work to close the acquisition of Core-Mark.

 

   

Our focus, as it has been with past acquisitions, is to ensure a seamless transition and integration process for our customers.

 

   

We look forward to providing the quality service you have come to expect from Eby-Brown now and when we close this transaction.


Forward-Looking Statements

This communication contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These statements include, but are not limited to, statements related to our expectations regarding the performance of our business, our financial results, our liquidity and capital resources, integration of our acquisition of Reinhart and other non-historical statements. You can identify these forward-looking statements by the use of words such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “projects,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words.

Such forward-looking statements are subject to various risks and uncertainties. The following factors, in addition to those discussed under the section entitled Item 1A. Risk Factors in the PFG’s Annual Report on Form 10-K for the fiscal year ended June 27, 2020 filed with the Securities and Exchange Commission (the “SEC”) on August 18, 2020, as such factors may be updated from time to time in our periodic filings with the SEC, which are accessible on the SEC’s website at www.sec.gov, could cause actual future results to differ materially from those expressed in any forward-looking statements:

 

   

the material adverse impact the COVID-19 pandemic has had and is expected to continue to have on the global markets, the restaurant industry, and our business specifically;

 

   

competition in our industry is intense, and we may not be able to compete successfully;

 

   

we operate in a low margin industry, which could increase the volatility of our results of operations;

 

   

we may not realize anticipated benefits from our operating cost reduction and productivity improvement efforts;

 

   

our profitability is directly affected by cost inflation and deflation and other factors;

 

   

we do not have long-term contracts with certain of our customers;

 

   

group purchasing organizations may become more active in our industry and increase their efforts to add our customers as members of these organizations;

 

   

changes in eating habits of consumers;

 

   

extreme weather conditions;

 

   

our reliance on third-party suppliers;

 

   

labor relations and cost risks and availability of qualified labor;

 

   

volatility of fuel and other transportation costs;

 

   

inability to adjust cost structure where one or more of our competitors successfully implement lower costs;

 

   

we may be unable to increase our sales in the highest margin portion of our business;

 

   

changes in pricing practices of our suppliers;

 

   

our growth strategy may not achieve the anticipated results;

 

   

risks relating to acquisitions, including the risk that we are not able to realize benefits of acquisitions or successfully integrate the businesses we acquire;

 

   

environmental, health, and safety costs;

 

   

the risk that we fail to comply with requirements imposed by applicable law or government regulations;

 

   

a portion of our sales volume is dependent upon the distribution of cigarettes and other tobacco products, sales of which are generally declining;

 

   

if the products we distribute are alleged to cause injury or illness or fail to comply with governmental regulations, we may need to recall our products and may experience product liability claims;

 

   

our reliance on technology and risks associated with disruption or delay in implementation of new technology;

 

   

costs and risks associated with a potential cybersecurity incident or other technology disruption;

 

   

product liability claims relating to the products we distribute and other litigation;

 

   

adverse judgements or settlements;

 

   

negative media exposure and other events that damage our reputation;

 

   

decrease in earnings from amortization charges associated with acquisitions;

 

   

impact of uncollectibility of accounts receivable;

 

   

difficult economic conditions affecting consumer confidence;

 

   

risks relating to federal, state, and local tax rules;

 

   

the cost and adequacy of insurance coverage;

 

   

risks relating to our outstanding indebtedness;

 

   

our ability to raise additional capital;

 

   

our ability to maintain an effective system of disclosure controls and internal control over financial reporting;

 

   

the possibility that the expected synergies and value creation from the acquisition of Reinhart will not be realized or will not be realized within the expected time period; and

 

   

the following risks related to the proposed acquisition of Core-Mark ( the “Core-Mark Transaction”):

 

   

the risk that U.S. federal antitrust clearance or other approvals required for the Core-Mark Transaction may be delayed or not obtained or are obtained subject to conditions that are not anticipated that could require the exertion of management’s time and PFG’s resources or otherwise have an adverse effect on PFG;

 

   

the possibility that conditions to the consummation of the Core-Mark Transaction, including approval by Core-Mark shareholders, will not be satisfied or completed on a timely basis and accordingly the Core-Mark Transaction may not be consummated on a timely basis or at all;

 

   

uncertainty as to the expected financial performance of the combined company following completion of the Core-Mark Transaction;

 

   

the possibility that the expected synergies and value creation from the Core-Mark Transaction will not be realized or will not be realized within the expected time period;

 

   

the exertion of PFG management’s time and PFG’s resources, and other expenses incurred and business changes required, in connection with complying with the undertakings in connection with U.S. federal antitrust clearance or other third-party consents or approvals for the Core-Mark Transaction;

 

   

the risk that unexpected costs will be incurred in connection with the completion and/or integration of the Core-Mark Transaction or that the integration of Core-Mark will be more difficult or time consuming than expected;

 

   

availability of debt financing for the Core-Mark Transaction and our refinancing plans on terms that are favorable to us;


   

a downgrade of the credit rating of PFG’s indebtedness, which could give rise to an obligation to redeem existing indebtedness;

 

   

potential litigation in connection with the Core-Mark Transaction may affect the timing or occurrence of the Core-Mark Transaction or result in significant costs of defense, indemnification and liability;

 

   

the inability to retain key personnel;

 

   

the possibility that competing offers will be made to acquire Core-Mark;

 

   

disruption from the announcement, pendency and/or completion of the Core-Mark Transaction, including potential adverse reactions or changes to business relationships with customers, employees, suppliers or regulators, making it more difficult to maintain business and operational relationships; and

 

   

the risk that, following the Core-Mark Transaction, the combined company may not be able to effectively manage its expanded operations.

Accordingly, there are or will be important factors that could cause actual outcomes or results to differ materially from those indicated in these statements. These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this release and in our filings with the SEC. Any forward-looking statement, including any contained herein, speaks only as of the time of this release or as of the date they were made and we do not undertake to update or revise them as more information becomes available or to disclose any facts, events, or circumstances after the date of this release or our statement, as applicable, that may affect the accuracy of any forward-looking statement, except as required by law.

Important Additional Information and Where to Find It

In connection with the proposed transaction, PFG intends to file with the SEC a registration statement on Form S-4 (the “Registration Statement”), which will include a prospectus with respect to the shares of PFG’s common stock to be issued in the proposed transaction and a proxy statement for Core-Mark’s stockholders (the “Proxy Statement”). Core-Mark will send the Proxy Statement to its stockholders, and each party may file other documents regarding the proposed transaction with the SEC. This communication is not a substitute for the Form S-4, the Proxy Statement or any other document that Core-Mark may send to its stockholders in connection with the proposed transaction. INVESTORS AND SECURITY HOLDERS OF PFG AND CORE-MARK ARE URGED TO READ THE FORM S-4, THE PROXY STATEMENT AND ANY OTHER RELEVANT DOCUMENTS (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) THAT WILL BE FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT PFG, CORE-MARK, THE PROPOSED TRANSACTION AND RELATED MATTERS. Investors and security holders of PFG and Core-Mark will be able to obtain free copies of the Form S-4, the Proxy Statement and other documents (including any amendments or supplements thereto) containing important information about PFG and Core-Mark once those documents are filed with the SEC, through the website maintained by the SEC at www.sec.gov. Copies of the documents filed with the SEC by PFG will be available free of charge on PFG’s website at www.investors.pfgc.com or by contacting PFG’s Investor Relations department at [email protected]. Copies of the documents filed with the SEC by Core-Mark will be available free of charge on Core-Mark’s website at ir.core-mark.com/investors or by contacting Core-Mark’s Investor Relations department at [email protected].

Participants In The Solicitation

PFG and its directors, executive officers and employees may be deemed to be participants in the solicitation of proxies from the stockholders of Core-Mark in connection with the proposed transaction.

Information about the directors and executive officers of PFG is set forth in its (i) Form 10-K for the fiscal year ended June 27, 2020, which was filed with the SEC on August 18, 2020 and (ii) proxy statement for its 2020 annual meeting of stockholders, which was filed with the SEC on October 9, 2020, and on its website at www.pfgc.com.

Investors may obtain additional information regarding the interest of such participants by reading the Form S-4, the Proxy Statement and other materials to be filed with the SEC in connection with proposed transaction when they become available.

No Offer or Solicitation

This communication is for informational purposes only and does not constitute, or form a part of, an offer to sell or the solicitation of an offer to sell or an offer to buy or the solicitation of an offer to buy any securities, and there shall be no sale of securities, in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended, and otherwise in accordance with applicable law.



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