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

ROSEMONT, In poor health.–(BUSINESS WIRE)–Feb 15, 2022–

US Meals Holding Corp. (NYSE: USFD) (“US Meals” or the “Firm”), one of many largest foodservice distributors in the USA, at present 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”) via 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 staff 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 supplied 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 midst of its analysis of Bernardo Hees, the Board recognized vital considerations relating to his management roles at earlier firms, which Mr. Hees was unable to dispel throughout the interview course of. In consequence, the Board was not prepared 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 Alternate Fee (“SEC”) discovered Kraft Heinz had falsified provider contracts to attain value 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 in opposition to Kraft Heinz have been filed because the 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 considerations 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 develop its salesforce to additional develop market share. The Firm sees continued alternative to develop market share, develop gross margins and enhance operational efficiencies. The initiatives that drive these outcomes have been underway for over a 12 months and largely overlap with the solutions made by Sachem Head. Up to now 12 months, US Meals has appointed two senior executives with deep provide chain and expertise expertise. We’re assured that the current adjustments now we have made to boost our working mannequin, mixed with the execution of our technique, will drive vital shareholder worth creation.

The US Meals Board consists of ten extremely certified administrators with vital experience within the foodservice and restaurant business 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 a wide range of viewpoints to tell its oversight of the Firm. The Board additionally just lately introduced adjustments in keeping with its dedication to finest 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 got substantial alternatives forward and stay up for discussing our plans and progress on our upcoming earnings name.

Shareholders will not be required to take any motion right now. The Board will current its suggestions relating to 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 performing as monetary advisors to US Meals. Sidley Austin LLP is serving as authorized counsel to US Meals.

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

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 might acquire 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 also 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 fairly 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 govt officers are members 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 relating to the direct and oblique pursuits, by safety holdings or in any other case, of the Firm’s administrators and govt 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 Kind 10-Okay for the 12 months ended January 2, 2021, filed with the SEC on February 16, 2021, and within the Firm’s Present Studies on Kind 8-Okay filed with the SEC every now and then. Modifications to the direct or oblique pursuits of the Firm’s administrators and govt officers are set forth in SEC filings on Preliminary Statements of Useful Possession on Kind 3 or Statements of Change in Possession on Kind 4. These paperwork can be found freed from cost as described above. Up to date info relating to the identities of potential members 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 after they turn into obtainable.

Ahead-Trying Statements

Statements on this press launch which aren’t historic in nature are “forward-looking statements” inside the which means of the federal securities legal guidelines. These statements typically embrace phrases similar to “imagine,” “anticipate,” “mission,” “anticipate,” “intend,” “plan,” “outlook,” “estimate,” “goal,” “search,” “will,” “might,” “would,” “ought to,” “might,” “forecast,” “mission,” “try,” “extra,” “purpose,” or comparable expressions and are primarily based upon numerous assumptions and our expertise within the business, in addition to historic traits, present situations, and anticipated future developments. Nonetheless, it is best to perceive that these statements will not be ensures of efficiency or outcomes and there are a selection of dangers, uncertainties and different elements that would trigger our precise outcomes to vary materially from these expressed within the forward-looking statements, together with, amongst others: value inflation/deflation and commodity volatility; competitors; reliance on third get together suppliers; interruption of product provide or will increase in product prices; adjustments in {our relationships} with prospects and group buying organizations; our skill to extend or preserve the best margin parts of our enterprise; efficient integration of acquisitions; achievement of anticipated advantages from value financial savings initiatives; fluctuations in gasoline prices; financial elements affecting shopper confidence and discretionary spending; adjustments in shopper consuming habits; our fame within the business; labor relations and prices; entry to certified and various labor; value and pricing buildings; adjustments in tax legal guidelines and laws and backbone of tax disputes; governmental regulation; product remembers and product legal responsibility claims; adversarial 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 situations, 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 continuing COVID-19 outbreak on our enterprise, suppliers, customers, prospects and staff; and potential prices related to shareholder activism.

CONTACT: INVESTOR CONTACT:

Jamie Moser / Matthew Sherman

Joele Frank, Wilkinson Brimmer Katcher

KEYWORD: UNITED STATES NORTH AMERICA ILLINOIS

INDUSTRY KEYWORD: SUPPLY CHAIN MANAGEMENT RETAIL FOOD/BEVERAGE

Copyright Enterprise Wire 2022.

PUB: 02/15/2022 11:35 AM/DISC: 02/15/2022 11:36 AM

Copyright Enterprise Wire 2022.