Sysco Names Nelson Peltz, Josh Frank of Trian to Board
August 20 2015 - 5:00PM
Dow Jones News
Sysco Corp. said Nelson Peltz and Josh Frank, both of Trian Fund
Management LP, will join its board, a move that comes less than
week after the activist investor disclosed a 7% stake in the food
distributor.
Sysco has faced investor pressure to accelerate its overhaul in
the wake of its abandoned merger plans with US Foods Inc. The
company has been hurt by competition from smaller, specialty
distributors and wholesale stores, such as Restaurant Depot.
The appointments, which are effective Friday, increase the board
size to 12.
Trian said last week that it wanted a seat on the board and
added Sysco should run its business more efficiently and better
align management's compensation with performance. The fund is now
Sysco's largest shareholder, according to FactSet.
Houston-based Sysco, which delivers food and supplies to
restaurants and other eateries, recently dropped its plans to merge
with US Foods following a judge's ruling against the deal on
antitrust grounds.
The $3.5 billion merger was in the works for about 18 months,
eating up Sysco's time and money as it prepared to fight the
Federal Trade Commission in court and move ahead with integration
planning. In the latest quarter, Sysco logged $430 million in
merger-related costs, contributing to a 71% decline in profit.
Sysco is in the midst of piecing together a new strategy, which
it has said will involve internal cost-cutting. It also plans to
update its technology and product assortment to compete with rivals
that have better online ordering and a wider selection of natural
and local foods.
Sysco, the nation's largest food distributor, has struggled with
increased competition from smaller rivals in recent years. The main
appeal of the planned acquisition of US Foods was to create savings
with its larger scale that would help reverse a yearslong trend of
declining profit margins.
Write to Josh Beckerman at josh.beckerman@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
August 20, 2015 17:45 ET (21:45 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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