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A recent vendor agreement with U.S. Foods and possible blockage of Sysco-U.S. Foods merger bodes well for GeoBargain on the radar Innovative Food Holdings (IVFH).  IVFH is a specialty food food service distribution business that offers over 7,000 specialty foods, direct from source, organic, artisanal and gluten free products, which are used on a daily basis by approximately 40,000 of the leading professional chefs across the entire United States.

  • Vendor Program Agreement with US Foods Executed:   On January 26, 2015, IVFH executed a Vendor Program Agreement between Food Innovations, Inc., its wholly-owned subsidiary, and U.S. Foods, Inc.  The term of the Agreement is from January 1, 2015 through December 31, 2016 and provides for up to three (3) automatic annual renewals thereafter if no party gives the other 30 days’ notice of its intent not to renew.
  • US Government Moves to Block Merger of US Foods and Sysco Corp.

IVFH benefits from these events in several ways.  Locking in the Vendor Program Agreement assures US Foods’ distribution channel will continue to serve IVFH’s needs.  Approximately 70% of IVFH’s specialty food business is conducted through US Foods.  The new agreement removes a material business risk.

U.S. Government Action Positive for IVFH

The US Government’s action is also a likely positive as it makes less likely the US Foods — Sysco (SYY) merger will go through.  The merger was originally announced in December 2013 and since then US Foods and its management team and employees have been impacted by uncertainty concerning the merger and whether the transaction would close or not.  Now US Foods can move full speed ahead as management can once again focus on operations.

Investors should note that in what appears to be the unlikely event that the US Foods — Sysco merger ultimately goes through that IVFH would have exposure to Sysco’s greater eco-system creating many opportunities.   Whether the merger goes through or not IVFH has gained exposure to Sysco and its management during the past year plus.  It is entirely possible the new relationships with Sysco’s management team will open doors for IVFH.    

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