Here’s Why Sysco’s “Transformative” Acquisition Is Sinking Its Stock

2 hours ago 1

Rich Duprey

Mon, March 30, 2026 astatine 11:29 AM CDT 5 min read

Sysco (SYY) is acquiring Jetro Restaurant Depot for $29.1 billion, combining 2025 revenues of $81 cardinal positive Jetro’s $16 cardinal to scope astir $100 cardinal nett revenue, with adjusted EBITDA rising 45% to $6.4 cardinal and $250 cardinal successful annualized outgo synergies targeted wrong 3 years, portion delivering mid- to high-single-digit EPS accretion successful twelvemonth one. US Foods (USFD) lacks Jetro’s higher-margin cash-and-carry transmission and pays nary dividend, leaving Sysco with 2.6 times the standard and a 2.64% output that remains intact.
Sysco is tumbling 13% successful noon trading due to the fact that the marketplace is fixated connected the financing bill—$21 cardinal successful caller indebtedness lifting nett leverage to 4.5 times and 91.5 cardinal caller shares diluting existing holders by 19.1%—even though absorption projects accelerated deleveraging to 2.75 times wrong 24 months and accretive net maturation starting immediately.
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Foodservice distributors navigate a $400 cardinal U.S. marketplace wherever autarkic restaurants request dependable proviso astatine competitory prices. Inflation has cooled, yet labour and procurement costs stay sticky. Companies that bolt connected higher-margin channels often unlock durable growth.

Yet Sysco (NYSE:SYY) is tumbling much than 13% successful noon trading today, aft the institution announced its $29.1 cardinal acquisition of Jetro Restaurant Depot. Income seekers who trust connected Sysco's 52-year Dividend King streak whitethorn ask: Did absorption conscionable manus them a acquisition oregon a headache? The numbers from Sysco's property merchandise amusement a woody built for semipermanent gains. Markets are fixated connected the short-term bill.

Sysco volition wage Jetro shareholders $21.6 cardinal successful currency positive 91.5 cardinal SYY shares, based connected the March 27 adjacent of $81.80. That values the people astatine 14.6 times 2025 operating income, oregon 13.0 times aft synergies. Jetro generated $16 cardinal successful 2025 gross and $2.1 cardinal successful EBITDA from 166 cash-and-carry warehouses crossed 35 states that service much than 725,000 autarkic operators. It besides produced $1.9 cardinal successful escaped currency travel with 30 consecutive years of EBITDA growth.

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After the woody closes, the combined institution volition deed astir $100 cardinal successful nett gross -- 20% supra Sysco's fiscal 2025 fig of much than $81 billion. Adjusted EBITDA rises 45% to $6.4 billion, and escaped currency travel climbs 55% to $5.5 billion. Management projects mid- to high-single-digit EPS accretion successful twelvemonth 1 and low- to mid-teens successful twelvemonth two. The woody turns instantly accretive to margins and escaped currency flow, too.

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