The Financial Times reports that Ahold plans to put its US Foodservice division on the market as a way of reducing some its debt and creating some distance between the division's financial irregularities and the mother company. The sale, according to analysts, is unlikely to recoup for Ahold the $3.6 billion it spent on to acquire US Foodservice just three years ago.
Ahold is declining comment at this time, but FT reports that interim CFO Dudley Eustace wants to sell all or part of the company, and is supported by new CEO Anders Moberg, who forced the resignation of US Foodservice founder and CEO Jim Miller almost as soon as he joined Ahold.
US Foodservice has been found through internal review of having overstated profits by some $880 million, and subsequent reviews of other Ahold operating divisions have found additional financial irregularities, including a $29 million overstatement at the company's Top division in upstate New York that has been labeled by Ahold itself as "fraud."
Ahold has $14 billion in debt to pay off, plus it is facing governmental investigations on both sides of the Atlantic into its financial affairs.
The FT reported that several private equity and venture capital firms had demonstrated some interest in US Foodservice, which is the second-ranked foodservice distributor in the US, behind Sysco.
In related news, Ahold announced this morning that it is selling Jamin, its 137-unit Dutch candy sore chain, in a management-led buyout. Terms of the deal were not disclosed.
Ahold is declining comment at this time, but FT reports that interim CFO Dudley Eustace wants to sell all or part of the company, and is supported by new CEO Anders Moberg, who forced the resignation of US Foodservice founder and CEO Jim Miller almost as soon as he joined Ahold.
US Foodservice has been found through internal review of having overstated profits by some $880 million, and subsequent reviews of other Ahold operating divisions have found additional financial irregularities, including a $29 million overstatement at the company's Top division in upstate New York that has been labeled by Ahold itself as "fraud."
Ahold has $14 billion in debt to pay off, plus it is facing governmental investigations on both sides of the Atlantic into its financial affairs.
The FT reported that several private equity and venture capital firms had demonstrated some interest in US Foodservice, which is the second-ranked foodservice distributor in the US, behind Sysco.
In related news, Ahold announced this morning that it is selling Jamin, its 137-unit Dutch candy sore chain, in a management-led buyout. Terms of the deal were not disclosed.
- KC's View:
- No surprises here. The only big questions that remain is whether Ahold will be forced to sell something else that's big to deal with its debt issues, and whether there is yet another surprise out there in the form of another accounting scandal that will make this even worse for the company.
