$7.1 Billion KKR and CDR Buyout of U.S. Foodservice Raises Questions About Job Safety for 27,000 and Food Safety for Millions of Americans

    WASHINGTON, May 10 /PRNewswire-USNewswire/ -- The proposed takeover of
 U.S. Foodservice by KKR and CDR raises concerns about how pension
 contributions for thousands of current employees and payments to retirees
 will be maintained and whether the private equity funds will commit to
 protect the safety of food being delivered to schools, restaurants, and
 government facilities, including Army, Navy and veterans' facilities. To
 track the buyout go to http://www.usfoodservicerevealed.blogspot.com
     Richard J. Schnall of CD&R has stated that private equity firms intend
 to leverage U.S. Foodservice's market positions to "accelerate growth in
 both revenue and profitability," but thus far nothing has been said
 publicly about plans for the thousands of U.S. Foodservice employees.
     The $7.1 billion price tag is considerably more than analysts had
 previously valued the company, and some observers note the high level of
 debt included in the deal, estimated to total $4.5 billion of the $7.1
 billion price tag. Royal Ahold purchased U.S. Foodservice in 2000 for $3.6
 billion, and recent valuations were between $5.5 and $5.7 billion. As
 recently as 2001, CDR owned part of U.S. Foodservice -- Alliant Foodservice
 -- which Ahold bought for $2.2 billion, including $750 million in debt.
     The private equity buyout industry, armed with more than a
 half-trillion dollars of capital, is today engineering financial deals that
 together are larger than the annual budgets of most of the world's
 countries. This financial juggernaut is generating hefty returns to its
 investors, extraordinary riches for its executives, and newly relevant
 questions about the impact of its business practices on American workers,
 businesses, communities, and the nation.
     SEIU released a set of principles designed to address the concerns of
 investors, the public, and workers including:
     -- The buyout industry should play by the same set of rules as everyone
        else, including providing transparency and disclosure about their
        businesses, and eliminating conflicts of interest and other potential
        abuses in their transactions;
     -- The public, including workers directly affected by the deal and
        consumer organizations should have a voice in the deals and benefit
        from their outcome; and
     -- Community stakeholders should have a voice in the deals and benefit
        from their outcome.
     SEIU members participate in pension funds with more than $1 trillion in
 assets, most of which invest 5 percent to 10 percent of their assets in
 private equity. SEIU is a longtime advocate of responsible corporate
 governance practices and an active member of the Council of Institutional
 Investors, an organization of more than 130 pension funds whose assets
 exceed $3 trillion.
     For more information about private equity go to behindthebuyouts.org
 
 

SOURCE Service Employees International Union

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