US Meals Responds to Sachem Head Capital Administration’s Try and Take Over Management of Board of Administrators

US Meals Supplied to Appoint Two New Administrators, Together with Sachem Head’s Principal; Sachem Head Declined US Meals’ Provide With out Engagement

Sachem Head Insisted on Appointment of Bernardo Hees as Govt Chairman

US Meals is Constructing on Momentum to Drive Substantial Shareholder Worth Creation

ROSEMONT, Unwell., February 15, 2022–(BUSINESS WIRE)–US Meals Holding Corp. (NYSE: USFD) (“US Meals” or the “Firm”), one of many largest foodservice distributors in the US, at this time issued the next assertion in response to a press launch from Sachem Head Capital Administration LP (“Sachem Head”), which disclosed its try to hunt management of the Board of Administrators (“Board”) by means of the nomination of seven administrators for election to the Firm’s ten-member Board at its 2022 annual assembly.

Since Sachem Head filed its Schedule 13D in respect of US Meals on October 7, 2021, members of our Board and administration crew have engaged with seriousness and urgency and had quite a few discussions with Sachem Head. We approached these discussions with an open thoughts and a willingness to work constructively. In December, the Board’s Nominating and Company Governance Committee interviewed every of the three director candidates Sachem Head privately proposed. Following these interviews and related due diligence, we provided to nominate two new administrators to the Board, together with Scott Ferguson, Sachem Head’s principal, and a mutually agreed-upon second director with related provide chain management expertise. Sachem Head made the appointment of Bernardo Hees as Govt Chairman a precondition for any engagement.

In the middle of its analysis of Bernardo Hees, the Board recognized important issues concerning his management roles at earlier corporations, which Mr. Hees was unable to dispel through the interview course of. Consequently, the Board was not keen to nominate him to the Board, not to mention title him Govt Chairman as initially proposed by Sachem Head. Amongst different issues, the Brazilian SEC (The Comissão de Valores Mobiliários or CVM) investigated Mr. Hees as the previous CEO and director of America Latina Logistica (ALL) over monetary irregularities within the firm’s monetary statements. In 2019, ALL and its former executives and administrators, together with Mr. Hees, paid a superb of BRL 10.27 million to settle with the Brazilian SEC. Individually, Mr. Hees stepped down as CEO of Kraft Heinz in 2019 after the corporate needed to take a $15.4 billion impairment cost. Kraft Heinz’s inventory value fell over 50% below Mr. Hees’ management, from the shut of the merger of Kraft and Heinz in 2015 till Mr. Hees departed in 2019, representing a loss in market capitalization of over $50 billion. In September 2021, the U.S. Securities and Change Fee (“SEC”) discovered Kraft Heinz had falsified provider contracts to realize price financial savings and artificially inflated earnings throughout Mr. Hees’ tenure as CEO. Kraft Heinz consented to a cease-and-desist order and paid a civil penalty of $62 million. Greater than twenty federal and state-level lawsuits towards Kraft Heinz have been filed for the reason that SEC investigation grew to become public, all of which title Mr. Hees as a defendant. At US Meals, we imagine that integrity in management issues. Mr. Hees’ interviews didn’t allay the Board’s issues about Mr. Hees’ oversight and management that resulted in these monetary improprieties.

US Meals has demonstrated a capability to create sustainable worth for shareholders. US Meals profitably grew market share and expanded EBITDA margins by 90 foundation factors within the 4 years main as much as the pandemic. In response to the pandemic, the Firm decreased administrative and promoting prices by $180 million. US Meals has reinvested roughly one-third of this quantity to broaden its salesforce to additional develop market share. The Firm sees continued alternative to develop market share, broaden gross margins and improve operational efficiencies. The initiatives that drive these outcomes have been underway for over a 12 months and largely overlap with the ideas made by Sachem Head. Prior to now 12 months, US Meals has appointed two senior executives with deep provide chain and expertise expertise. We’re assured that the latest modifications we’ve made to boost our working mannequin, mixed with the execution of our technique, will drive important shareholder worth creation.

The US Meals Board consists of ten extremely certified administrators with important experience within the foodservice and restaurant trade in addition to distribution, finance, expertise, governance and C-suite working expertise. During the last 4 years, the Board has added 4 new members, reflecting a dedication and openness to contemporary concepts, and leading to a median tenure of the US Meals Board of 5.4 years. As well as, with various administrators comprising 30% of the Board, it has cultivated quite a lot of viewpoints to tell its oversight of the Firm. The Board additionally just lately introduced modifications according to its dedication to greatest practices of company governance, together with the separation of the roles of Chairman and CEO.

We acknowledge there may be extra work to do and are dedicated to listening to all our shareholders as we drive the enterprise ahead. We’ve substantial alternatives forward and look ahead to discussing our plans and progress on our upcoming earnings name.

Shareholders should not required to take any motion right now. The Board will current its suggestions concerning all director nominees for election on the Firm’s 2022 annual assembly within the Firm’s definitive proxy assertion, accompanying proxy card and different related paperwork to be filed with the SEC. The Firm’s 2022 annual assembly has not but been scheduled.

Centerview Companions LLC and J.P. Morgan Securities LLC are appearing as monetary advisors to US Meals. Sidley Austin LLP is serving as authorized counsel to US Meals.

About US Meals

US Meals is considered one of America’s nice meals corporations and a number one foodservice distributor, partnering with roughly 250,000 eating places and foodservice operators to assist their companies succeed. With 69 broadline places and 80 money and carry shops, US Meals gives its clients with a broad and revolutionary meals providing and a complete suite of e-commerce, expertise and enterprise options. US Meals is headquartered in Rosemont, Unwell. Go to www.usfoods.com to study extra.

Extra Info

The Firm intends to file a proxy assertion on Schedule 14A, an accompanying WHITE proxy card and different related paperwork with the SEC in reference to the solicitation of proxies from the Firm’s shareholders for the Firm’s 2022 annual assembly of shareholders. SHAREHOLDERS OF THE COMPANY ARE STRONGLY ENCOURAGED TO READ THE COMPANY’S DEFINITIVE PROXY STATEMENT (INCLUDING ANY AMENDMENTS OR SUPPLEMENTS THERETO) AND ALL OTHER DOCUMENTS FILED WITH THE SEC CAREFULLY AND IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION. Shareholders could receive a replica of the definitive proxy assertion, an accompanying WHITE proxy card, any amendments or dietary supplements to the definitive proxy assertion and different paperwork filed by the Firm with the SEC at no cost on the SEC’s web site at www.sec.gov. Copies may even be obtainable at no cost within the “SEC Filings” subsection of the “Monetary Info” part of the Firm’s Investor Relations web site at https://ir.usfoods.com/buyers or by contacting the Firm’s Investor Relations division at [email protected], as quickly as moderately practicable after such supplies are electronically filed with, or furnished to, the SEC.

Members within the Solicitation

The Firm, its administrators and sure of its government officers are contributors within the solicitation of proxies from the Firm’s shareholders in reference to issues to be thought of on the Firm’s 2022 annual assembly of shareholders. Info concerning the direct and oblique pursuits, by safety holdings or in any other case, of the Firm’s administrators and government officers is included within the Firm’s Proxy Assertion on Schedule 14A for its 2021 annual assembly of shareholders, filed with the SEC on April 2, 2021, the Firm’s Annual Report on Type 10-Ok for the 12 months ended January 2, 2021, filed with the SEC on February 16, 2021, and within the Firm’s Present Studies on Type 8-Ok filed with the SEC once in a while. Adjustments to the direct or oblique pursuits of the Firm’s administrators and government officers are set forth in SEC filings on Preliminary Statements of Helpful Possession on Type 3 or Statements of Change in Possession on Type 4. These paperwork can be found freed from cost as described above. Up to date info concerning the identities of potential contributors and their direct or oblique pursuits, by safety holdings or in any other case, within the Firm will likely be set forth within the Proxy Assertion for the Firm’s 2022 annual assembly of shareholders and different related paperwork to be filed with the SEC, if and once they develop into obtainable.

Ahead-Wanting Statements

Statements on this press launch which aren’t historic in nature are “forward-looking statements” throughout the which means of the federal securities legal guidelines. These statements typically embrace phrases equivalent to “imagine,” “anticipate,” “challenge,” “anticipate,” “intend,” “plan,” “outlook,” “estimate,” “goal,” “search,” “will,” “could,” “would,” “ought to,” “might,” “forecast,” “mission,” “try,” “extra,” “aim,” or comparable expressions and are primarily based upon varied assumptions and our expertise within the trade, in addition to historic tendencies, present circumstances, and anticipated future developments. Nevertheless, it’s best to perceive that these statements should not ensures of efficiency or outcomes and there are a variety of dangers, uncertainties and different elements that might trigger our precise outcomes to vary materially from these expressed within the forward-looking statements, together with, amongst others: price inflation/deflation and commodity volatility; competitors; reliance on third get together suppliers; interruption of product provide or will increase in product prices; modifications in {our relationships} with clients and group buying organizations; our capacity to extend or preserve the very best margin parts of our enterprise; efficient integration of acquisitions; achievement of anticipated advantages from price financial savings initiatives; fluctuations in gas prices; financial elements affecting client confidence and discretionary spending; modifications in client consuming habits; our status within the trade; labor relations and prices; entry to certified and various labor; price and pricing buildings; modifications in tax legal guidelines and laws and backbone of tax disputes; governmental regulation; product recollects and product legal responsibility claims; antagonistic judgments or settlements ensuing from litigation; disruptions of current applied sciences and implementation of latest applied sciences; cybersecurity incidents and different expertise disruptions; administration of retirement advantages and pension obligations; excessive climate circumstances, pure disasters and different catastrophic occasions; dangers related to mental property, together with potential infringement; indebtedness and restrictions below agreements governing indebtedness; potential rate of interest will increase; dangers associated to the influence of the continued COVID-19 outbreak on our enterprise, suppliers, customers, clients and staff; and potential prices related to shareholder activism.

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Contacts

INVESTOR CONTACT:
Melissa Napier
847-720-2767
[email protected]

MEDIA CONTACT:
Jamie Moser / Matthew Sherman
Joele Frank, Wilkinson Brimmer Katcher
212-355-4449