Sysco Nears $29 Billion Restaurant Depot Deal, Targeting Independent Operators

For the independent cook or operator who's run low on product mid-week, Restaurant Depot has been the answer: no salesperson, no delivery window, no membership fee, just a tax ID and access to 166 warehouse floors stocked seven days a week. That lifeline is about to change hands.

Sysco, the Houston-based distributor that already supplies more than 700,000 restaurants, hospitals, and hotels, announced a definitive agreement Monday to acquire Jetro Restaurant Depot for $29.1 billion in cash and stock, the largest acquisition in the company's history. The deal hands Sysco control of a cash-and-carry network serving roughly 725,000 independent operators annually across 35 states, with $16 billion in annual revenue.

Under the terms, Restaurant Depot's family shareholders will receive $21.6 billion in cash and 91.5 million Sysco shares, giving them approximately a 16% stake in the combined company. Together, the two businesses generated nearly $100 billion in revenue and $6.4 billion in adjusted EBITDA last year.

CEO Kevin Hourican framed the two companies as serving fundamentally different needs. "There is minimal overlap between Sysco and Restaurant Depot's customers," he told analysts. Sysco's core business runs on scheduled deliveries with consultative salespeople; Restaurant Depot's model is purely transactional, built for operators who need product today, not next Tuesday. Sysco projected $250 million in annual synergies within the first three years and plans to open more than 125 net new Restaurant Depot locations over the coming decades.

The growth case rests partly on real estate. Restaurant Depot owns roughly 80% of its physical locations near metro markets, many acquired decades ago, a portfolio Hourican said Sysco could not replicate today. Nathan Kirsh, who opened the first Jetro warehouse in Brooklyn in 1976, is now in his 90s. His children do not run the business, and succession planning was part of the reason the Kirsh family decided to sell.

For independent operators, the central question is pricing. Restaurant Depot built its reputation on low costs accessible to small kitchens without the purchasing power of chains. Hourican argued Sysco's national supply chain would drive costs down: "The merger will increase purchasing efficiencies and, consequently, offer lower prices to our customers." Antitrust regulators are unlikely to take that promise on faith. Fitch placed Sysco on "rating watch negative" while Moody's moved its ratings to review for downgrade. Sysco is financing the deal with $21 billion in new and hybrid debt, and the stock fell roughly 12% on the news.

The regulatory backdrop carries historical weight. The FTC successfully blocked Sysco's $3.5 billion bid to acquire US Foods in 2015 after arguing the deal would raise prices. For the Restaurant Depot deal, Hourican said he expects a favorable decision from antitrust regulators, arguing the two companies operate in distinct channels with limited customer overlap. "The facts of the case are it is a different channel, the primary customer is different, and there are synergies on how we can bring value to the end consumer," he said.

Restaurant Depot will operate as a standalone segment within Sysco under Richard Kirschner, with its headquarters remaining in Whitestone, N.Y. The companies said they do not anticipate workforce reductions. The deal is expected to close by the third quarter of fiscal 2027, pending regulatory approval, with a verdict that will shape supply costs for hundreds of thousands of independent kitchens across the country.