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RICHMOND, Va. - Performance Food Group says it is exploring strategic alternatives for its Salinas, Calif.-based Fresh Express produce division and has retained Goldman, Sachs & Co. to assist in the process.
With annual sales of $933 million in 2003, Performance Food Group's fresh-cut division is the nation's largest fresh-cut processor in the retail packaged salad category. In a statement chairman and c.e.o. Bob Sledd said: "Since our company's inception, we have committed significant effort toward building our fresh-cut business to its current leadership position in the industry. As we assess the future of Performance Food Group and consider the changing balance in our business between foodservice distribution and fresh produce processing, we believe that it is the appropriate time to evaluate strategic alternatives to continue the growth of the fresh-cut segment while considering the best interests of our shareholders, customers, and associates."
While the company says it has made "no predetermination as to any particular strategic alternative," options include, but are not limited to, the possible sale of the division as an ongoing business, the creation of a stand-alone company operating the fresh-cut business, or keeping the fresh-cut division as part of the company.
Performance Food Group, which markets and distributes more than 64,000 national and private label food and food-related products to approximately 48,000 restaurants, hotels, cafeterias, schools, healthcare facilities, and other institutions, acquired Fresh Express for approximately $303 million in October 2001. The cash deal -- inclusive of an additional $10 million payable upon the achievement of certain operating targets -- also featured the repayment of net debt outstanding, and the assumption of certain liabilities.