Activist Investor Sachem Head to Push for Change at US Foods

(Bloomberg) -- Activist investor Sachem Head Capital Management has built a stake in US Foods Holding Corp. and said it plans to push for changes at the company, including potentially seeking board representation.

The New York-based activist fund owns a 9.2% stake in the food distributor, including stock and options, according to a regulatory filing Thursday. The investor said it has also reached an agreement with Bernardo Hees, the former chief executive officer of Kraft Heinz Co., to serve as an adviser and potential director nominee. Hees is currently chairman of car rental company Avis Budget Group Inc., and is a former partner at 3G Capital Inc. 

Sachem Head, which is run by Scott Ferguson, said it believes US Foods is undervalued. It intends to discuss with the company's leadership potential changes to its management structure, operations and strategic direction, among other moves.

US Foods said in a statement that it has had an “ongoing, open dialogue” with Sachem Head and other shareholders. “Our board of directors and management team are committed to ensuring that our strategic direction best positions US Foods to deliver sustainable growth and shareholder value.”

Shares of US Foods rose 3.3% to $37.28 Thursday in New York, giving the company a market value of about $8.3 billion. Its shares have gained 12% this year. 

The Rosemont, Illinois-based foodservice company said in August that it was seeing an uptick in business coming out of the pandemic, but that it expected supply-chain issues to linger for the next few quarters. 

“Our industry is rapidly recovering, and we are participating in that recovery in a meaningful way,” Pietro Satriano, the CEO of US Foods, said on a conference call in August. 

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