US Foods Holding (USFD) 8-KEntry into a Material Definitive Agreement

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

March 6, 2020

Date of Report (Date of earliest event reported)

(Exact name of registrant as specified in its charter)

9399 W. Higgins Road, Suite 100

Rosemont, IL 60018

(Address of principal executive offices) (Zip code)

(847) 720-8000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant is an emerging growth company as defined in as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Item 1.01. Entry Into a Material Definitive Agreement

Merger Agreement

On March 5, 2020, US Foods, Inc. (the “Company”) entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among the Company, CNC Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of the Company, Smart Stores Holdings Corp., a Delaware corporation (“Smart Foodservice”), and Smart & Final Holdings, Inc., as the Stockholders’ Representative under the Merger Agreement (in such capacity, the “Stockholders’ Representative”), pursuant to which the Company agreed to acquire Smart Foodservice for $970 million in cash, on a cash-free, debt-free basis, subject to customary post-closing adjustments (the “Acquisition”).

The Merger Agreement contains customary representations and warranties of the Company and Smart Foodservice, which are generally subject to a materiality qualifier.  Additionally, the Merger Agreement provides for customary interim operating restrictions on the conduct of Smart Foodservice during the period between the execution of the Merger Agreement and the closing of the Acquisition.

Prior to the execution of the Merger Agreement, the retail grocery business of Smart & Final LLC and certain of its affiliates (collectively, “Smart & Final”) was separated from Smart Foodservice pursuant to the terms of a Master Separation Agreement (the “Separation Agreement”) entered into between Smart Foodservice and Smart & Final.  The Separation Agreement also provides that certain Smart & Final entities will indemnify Smart Foodservice for certain liabilities, including pre-closing taxes and taxes incurred in connection with the separation of the businesses.

Each party’s obligation to consummate the Acquisition is subject to customary closing conditions and is further conditioned upon receipt of required regulatory approvals, including the expiration or termination of the applicable waiting period (and any extension thereof) under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the “HSR Act”). The Merger Agreement also contains certain termination rights, including the right of either the Company or Smart Foodservice to terminate the Merger Agreement if the closing has not occurred on or before March 5, 2021, which period may be extended, at either party’s election, by up to three months if all conditions to closing other than those relating to HSR Act approval have been satisfied.  Further, if the Merger Agreement is terminated under certain circumstances relating to the failure to obtain antitrust approvals, or if there is a final, non-appealable injunction arising under antitrust laws preventing the Acquisition, then the Company has agreed to pay Smart Foodservice a $60 million termination fee.

The foregoing description of the Merger Agreement is not complete and is qualified in its entirety by the full text of the Merger Agreement, which is attached as Exhibit 2.1 to this Form 8-K and is incorporated herein by reference.

The Merger Agreement is included with this filing only to provide investors with information regarding its terms, and not to provide investors with information regarding the Company or Smart Foodservice.  The representations and warranties of the Company and Smart Foodservice contained in the Merger Agreement: (a) were made only for purposes of the Merger Agreement and as of specific dates, (b) were solely for the benefit of the parties to the Merger Agreement; (c) do not survive the consummation of the Acquisition; (d) may be subject to limitations agreed upon by the parties, including being qualified by confidential disclosures made to the Company for purposes of allocating risk between the parties rather than establishing these matters as facts; and (e) may be subject to materiality qualifications that differ from those of investors.  Investors are not third-party beneficiaries under the Merger Agreement, and accordingly, should not rely on the representations and warranties or any descriptions thereof as characterizations of the actual state of facts or condition of the Company or Smart Foodservice or any of their respective subsidiaries, affiliates or businesses. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures.

Item 8.01. Other Events

On March 6, 2020, the Company issued a press release (the “Press Release”), announcing the execution of the Merger Agreement.  A copy of the Press Release is attached as Exhibit 99.1 to this Form 8-K and is incorporated herein by reference.

Forward-Looking Statements

Information set forth in this Form 8-K, including financial estimates and statements as to the completion and effects of the proposed transaction between the Company and Smart Foodservice, are “forward‐looking statements” within the meaning of the federal securities laws. These forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results to differ materially from those expressed in, or implied by, the forward‐looking statements. Such forward-looking statements include, but are not limited to, statements about the benefits of the Acquisition, including financial and operating results, the combined company’s plans, objectives, expectations and intentions, and other statements that are not historical facts, and are based upon the current beliefs and expectations of the Company and Smart Foodservice and are subject to significant risks and uncertainties which are beyond the control of US Foods Holding Corp. Among the risks and uncertainties that could cause actual results to differ from those expressed in the forward-looking statements are: (1) the occurrence of any event, change or other circumstance that could give rise to the termination of the Merger Agreement, (2) the risk that the necessary regulatory approvals may not be obtained as a result of conditions that are not anticipated, (3) risks that any of the closing conditions to the Acquisition may not be satisfied in a timely manner, (4) failure to realize the benefits of the Acquisition and (5) the effect of the announcement of the Acquisition on the ability of Smart Foodservice to retain customers and retain and hire key personnel and maintain relationships with suppliers, and on their operating results and businesses generally.  Discussion of additional risks and uncertainties are included in the sections entitled “Risk Factors” and “Forward-Looking Statements” in the US Foods Holding Corp. Annual Report on Form 10-K for the fiscal year ended December 28, 2019, which was filed with the Securities and Exchange Commission on February 13, 2020. The forward-looking statements contained in this Form 8-K speak only as of the date of this Form 8-K. US Foods Holding Corp. undertakes no obligation to update or revise any forward-looking statements.

Item 9.01. Financial Statements and Exhibits

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.