Moody’s downgrade for Sysco after US company’s acquisition of London-based food supplier Brakes
Moody's has downgraded Sysco, citing the US company's acquisition of London-based food supplier Brakes for $3.1bn (£2.2bn).
The ratings agency also believes Sysco will use Brakes as a platform to make further acquisitions in Europe in the near future.
Sysco's long-term rating has been downgraded from A2 to A3 and short-term from Prime-1 to Prime-2, with a negative outlook.
Moody's vice president Charlie O'Shea said Sysco's credit profile was being considered along with debt from the Brakes transaction.
He added: “The negative outlook considers, among other things, the potential for further acquisitions in Europe that we believe could happen rather quickly post-closing of Brakes as Sysco is using Brakes as a platform."
When Sysco's acquisition was announced in late February, chief executive Bill DeLaney said: “This transaction will unite Sysco with a leading food service distributor in Europe with demonstrated capability to sustainably grow its business over time.
“Beginning with a common customer-centric mindset, our companies are strategically aligned with compatible cultures and similar business models.”