How Sysco Is Financing Jetro: A Buyer's Capital Stack, Read by a Seller

Sysco closed a C$1.5 billion senior notes offering on September 25, the latest piece of a financing package that also included a $1 billion stock sale and a reported $17 billion global bond offering. The money funds Sysco's purchase of Jetro Restaurant Depot, a cash-and-carry restaurant supplier, for $29.1 billion including debt. For owners thinking about a sale, the acquisition is less instructive than the checkbook behind it: the structure shows how a large buyer pays, what it promises its lenders, and where a seller's risk sits.

What Sysco agreed to buy, and at what price

Announced on March 30, the deal values Jetro at $29.1 billion of enterprise value, which is the price of the equity plus the debt a buyer takes on. Jetro generated roughly $16 billion of revenue, about $2.1 billion of EBITDA (earnings before interest, taxes, depreciation, and amortization), and about $1.9 billion of free cash flow in 2025. Sysco described the price as 14.6 times operating income before synergies and 13.0 times after them.

Consideration is split. Jetro's owners receive $21.6 billion in cash and 91.5 million Sysco shares, which will leave them with about 16 percent of the combined company. Sysco expects roughly $250 million of annual cost savings within three years, mostly from purchasing and supply chain, equal to 12.5 percent of Jetro's operating income. That synergy estimate is what lets a buyer pay a full multiple: the buyer is paying partly for what it can change, and the seller is being paid partly for what the buyer will do.

How the money is being raised

A buyer of this size rarely holds $21.6 billion in cash, so it assembles the funds from several sources, each with a different cost and a different set of conditions.

The first is a bridge facility, an $18.25 billion commitment from banks that guarantees the cash will be there at closing. A bridge is a backstop, not a plan. It is expensive, and lenders expect it to be refinanced quickly. The refinancing is what the September activity represents: the C$1.5 billion Canadian offering, priced at 4.250 percent for notes due 2030 and 4.800 percent for notes due 2034, sits alongside U.S. dollar and euro tranches, including a hybrid bond that carries features of both debt and equity. Bank facilities add a $3.0 billion term loan, a revolving credit line, and a $750 million delayed-draw facility from CoBank.

The second source is equity. On September 15 Sysco sold 12.3 million shares at $81, about 3 percent below the prior close, to raise roughly $1 billion. The stock fell on the news. Companies accept that discount because leverage has limits, and a slice of equity signals to lenders and rating agencies that the buyer is not funding the entire price with borrowing.

The third source is the seller. The 91.5 million shares paid to Jetro's owners are, in effect, financing: the buyer conserves cash and the seller takes on the buyer's stock risk.

What the leverage tells you

Sysco's own prospectus puts pro forma net debt at $32.3 billion against $6.61 billion of adjusted EBITDA, or 4.89 times. Leverage that high is manageable for a company with steady cash flow, but it comes with promises. Sysco has committed to cut net leverage by at least 1.0 turn within 24 months of closing, with a long-term target near 2.75 times, and it has suspended share repurchases in the meantime.

Those commitments matter to sellers for a practical reason. A buyer that must delever will run the acquired business for cash. Working capital gets tighter, discretionary spending slows, and earnouts or retained equity in the buyer can be affected by decisions made to satisfy lenders. If part of your price depends on how the business performs after closing, or on the buyer's share price, the buyer's leverage target is part of your risk.

The protections buried in the notes

The bond documents also show how buyers protect themselves and how that protection flows to investors. Sysco's new notes include a special mandatory redemption: if the acquisition does not close by the outside date of March 30, 2028, the company must buy the notes back at 101 percent of face value. Lenders funded the deal early and are protected if it fails.

Sellers have a mirror-image question. Bondholders have a defined remedy if the deal does not close; what does the seller have? The answer sits in the purchase agreement: a financing condition, a reverse termination fee (a payment the buyer owes if it fails to close), and specific-performance rights that let the seller compel the buyer to close. A commitment letter from banks for the full purchase price, as here, is what gives a seller confidence that the buyer can perform.

Applying this to a private sale

Most owners will not sell to a company with an $18.25 billion bridge, but the questions scale down to any buyer.

What to watch next

Sysco still needs regulatory approvals, with closing expected in the third quarter of its fiscal 2027. The first test is the market: the remaining tranches and the pricing of the hybrid will show whether investors treat the leverage as acceptable. The second is how the stock trades once the equity is absorbed. The third is whether the 24-month deleveraging plan holds if restaurant traffic softens. Owners should watch all three, because they show how much room buyers have to pay for good businesses when financing is neither cheap nor scarce.