Sysco buys Limerick-based Pallas Foods

PALLAS FOODS, a Co Limerick-based food distributor, has been sold for an undisclosed fee to international food group Sysco.

Pallas is owned and run by the Geary family and had annual revenues of €155 million last year. The company supplies and distributes cooked, uncooked, chilled and frozen foods to catering outlets in the Republic and Northern Ireland. It has eight operating depots across Ireland.

The company supplies a range of businesses including smaller supermarkets, hotels, hospitals, restaurants and coffee shops.

Tim Geary founded Pallas in the 1980s and he and three of his sons are company directors and on the management team. A fourth son also works for the company. The company employs 500 people.

Commercial director Tadhg Geary said Sysco was the right fit for Pallas as it is “purely a food service company” and therefore different to the numerous other buyout offers the company received in recent years.

“From all the stakeholders’ points of view, it was the right thing to do. There comes a time in a family business when you have to decide if you are going to exit or not. This is the right thing for us, for Pallas and for the employees,” Mr Geary said.

He said Pallas was Sysco’s first acquisition outside North America and was made after considering more than 120 companies.

The US group, based in Texas, has been listed on the New York Stock Exchange since 1970. In that period, turnover has grown from $115 million to $37.5 billion.

Operating income in the 12 months to June 2008, its most recent full-year period, rose 10 per cent to $1.9 billion.

Talks on the purchase began last September and the deal was signed late Monday evening.

Pallas has enjoyed strong growth over recent years. According to the most recent Company’s Registration Office filing, for the year ending September 30th, 2007, it earned pretax profits of €2.08 million on a turnover of €116 million. Revenues have grown strongly in recent years, rising from €84.3 million in 2006 and €61.2 million in 2005.

The workforce has also grown over the period. Pallas now employs 500 people, up from the 386 employed at the end of 2007 and 297 at the end of 2006.

Mr Geary attributes this to organic growth and says, despite a tightening market, the company is on course to grow this year.

“We achieved growth for the first quarter this year, although the market is down around 20 per cent, and we still think we will come in with a decent growth figure in 2009.”

He said the takeover would have no impact on staff. All senior executives of Pallas have signed long-term employment contracts with Sysco. Ken Spitler, Sysco’s vice-chairman, said in a statement the acquisition would allow Sysco explore international growth “with a well-regarded team that provides the high-quality service standards that Sysco customers are accustomed to”.

The deal does not include related companies including Pallas Foods Manufacturing and Pallas Foods (Research) Ltd, which are controlled by common directors.