Sysco to acquire produce distributor The Coastal Companies

A Maryland produce distributor that makes around $600 million in annual revenue will soon fall under the umbrella of Sysco Corp., Sysco said Tuesday.

The Houston-based distributor, the largest in North America, said it will buy the smaller company for an undisclosed price to bolster its manufacturing capabilities and presence in the Northeast. In addition to food distribution, The Coastal Companies manufactures prepared meals, pre-sliced fruits and vegetables and sells them wholesale to stores.

“This exciting acquisition enables (Sysco) to enhance its service to the important Mid-Atlantic region, strategically diversify its portfolio by adding retail and ready-to-eat capabilities and adds state-of-the-art facilities with capacity for growth,” Greg Bertrand, Sysco’s executive vice president of U.S. foodservice, said in a statement.

Sysco operates 343 distribution facilities worldwide and has more than 650,000 clients, including restaurants, health care facilities, universities and hotels. As companies of all kinds emerged from the pandemic facing shortages in components, material and other supplies, Sysco executives said earlier this year they prepared their distribution networks to weather supply chain challenges with an eye toward grabbing market share.

In May, Sysco announced it would buy Greco and Sons, an American distributor of Italian meats that generates $800 million in annual revenue.

Revenues are up for Sysco as people have flocked again to restaurants in the post-vaccine economy. Profits surged 74 percent to $378 million in the quarter ended Oct. 2 from $217 million during the same period in 2020. Revenue jumped 40 percent to $16.5 billion from $11.8 billion last year.

Sysco stock closed at $72.92 cents a share Tuesday, down 7 cents.