Sysco Corporation - Weekend of Furious Transaction Work Makes Sysco the Biggest

Challenge

Client Sysco Corporation, at the time the second largest food service company, was bidding to purchase the fourth largest company in the field. The purchase would make Sysco the largest food service company. Sysco initially was not a successful bidder; however, the successful bidder failed to reach contract terms for the purchase and the seller offered Sysco an opportunity, over a weekend, to come to terms with the seller. AGG was asked on a Thursday to be in New York on Friday to execute a contract before Monday.

Approach

We made the strategic decision that if this time schedule were to be met, we would have to eschew the normal drafting arguments and focus our attention on material business and legal issues. We convinced counsel for the seller to adhere to the same concept. The ensuing work included performing due diligence, simultaneously arranging a bank loan to finance the purchase, and selling off several subsidiaries of the target company that Sysco did not want.

Result

By Sunday night we had a signed contract for the largest deal in Sysco’s history, $725 million. We reached an informal understanding with seller’s counsel that if either side discovered mistakes or cosmetic errors, we would work in good faith to arrive at a fair compromise, knowing that both sides wanted the transaction to occur and that both sides had been under extreme time pressure to conclude the agreement. While more issues did arise and were resolved easily, no significant economic or legal issues arose. Today, Sysco serves approximately 400,000 customers in more than 100 countries.