It hasn’t even been a full seven days since Sysco Corporation, a leading multinational marketer and distributer of food products, disclosed Trian Fund Management LP’s investment in the food distributing firm for a seven percent stake, and there has already been a new announcement.
The company announced the addition of Trian’s Nelson Peltz and Josh Frank to the board after an unusually quick agreement, which generally reflects activist investors’ growing influence with public sector companies.
Sysco faces the pressure to boost profit margins and adopt a new strategy in the wake of its unsuccessful attempt at acquiring their rivals, U.S. Foods Inc.
This move to expand the company’s board to 12 members comes after Peltz, the co-founder and Chief Executive Officer of Trian, commented on Sysco’s disappointing performance. “Sysco is a leader in its business, and we believe it is undervalued and has tremendous long-term potential,” he added.
Non-executive chairman of Sysco, Jackie Ward, released a statement on August 20, confirming the engagement with Trian, saying that they were looking forward to “benefiting from their insights and contributions.”
This investment has made Trian the highest shareholder in Sysco.
Gasparro, A., et al., “Sysco Names Nelson Peltz, Josh Frank of Trian to Board,” The Wall Street Journal web site, August 20, 2015; http://goo.gl/EirTrc.