Sysco (SYY)：关于RD交易的投资者调查结果

Danilo Gargiulo+1 917 344 8475danilo.gargiulo@bernsteinsg.com Nancy Wu+1 917 344 8545nancy.wu@bernsteinsg.com RatingMarket-Perform Price Target SYY 90.00 USD Sysco (SYY): Findings from our investor survey on the RD deal We conducted a survey of institutional investors following the announcement of thedeal between Sysco and Restaurant Depot. The results are based on a limited sample ofrespondents (n=41); the survey findings do not reflect our views and should be interpreted inthe context of the limited sample size. The survey results show that the investor base is more negative than we expected,particularly given the strategic rationale of the deal. Across the full sample, 71% ofrespondents expressed some level of dissatisfaction, despite appreciating the fact thatSysco is buying the number 1 cash and carry business (39%), and the fact that this enablesSysco to enter a higher margin business (54%) (hence resulting in an accretive deal, again54%). That said, we believe the negativity isless about disagreement with the strategiclogic and more about concerns around financial risk and timing. Leverage was themost-cited ‘reason not to like the deal’ at 61%, and stated investors maximum toleranceclustered mostly between 3.0x–3.5x (38%) if not 3.5-4x (35%), below the roughly 4.5xclosing leverage implied by the deal. We view this as reinforcing our view that leverage is thestrongest bear point - not the quality of the acquired asset - and that the proposed capitalstructure pushes beyond the comfort zone a portion of the shareholder base. Timing also remains a key concern.The timing of the acquisition was the second-most-cited ‘reason not to like the deal’ overall (56%) and was especially prominent among currentSysco owners (74%). The survey suggests that many investors view the deal as arriving tooearly in the cycle, before Sysco has fully re-established market dominance. The stock could see a momentum, despite the negative reaction to the deal.Mostrespondents shared they are looking to maintain their stock position (59%), but we notethat more investors are looking to increase their position (29%) than to decrease it (12%).According to respondents, the most important catalysts that could help the stock acceleratefrom the current $70-75 trading ranges are: improvement in market share in local casevolume (29%) or in restaurant demand and macro-economic conditions (29%) Investment Implications We maintain our Market-Perform and target price of $90 DETAILS KEY TAKEAWAYS After Sysco’s announcement to acquire Restaurant Depot, we ran a survey to gauge investors’ feedback on the deal. Our samplecomprised of 41 investors, of which 68% Long-Only investors (vs 32% Hedge Funds) and 46% are current shareholders. Beloware the key takeaways from the survey, that should be interpreted in the context of the sample size. Investors appear to be dissatisfied with the deal: •12% of respondent are satisfied or highly satisfied with the deal while 42% of respondents are dissatisfied or highlydissatisfied (the remaining respondents were either moderately satisfied or moderately dissatisfied)•Long-onlies are marginally more satisfied on the deal than Hedge Funds: 11% of LOs are satisfied / highly satisfied while36% of LOs are dissatisfied / highly dissatisfied (-25% net), compared to 15% of Hedge Funds who were satisfied / highlysatisfied and 54% who were dissatisfied / highly dissatisfied (-39% net)•Among the respondents, current shareholders are marginally more satisfied on the deal than non-shareholders: 16%of shareholders are satisfied / highly satisfied while 32% of shareholders are dissatisfied / highly dissatisfied (-16%net), compared to 9% of non-shareholders who were satisfied / highly satisfied and 45% who were dissatisfied / highlydissatisfied (-36% net) Investors appear relatively positive on the long-term value creation of the deal. The top 3 aspects that respondentscited the most as reasons to like the deal include that: •The deal is accretive (54%) •Sysco enters a faster-growing, more resilient, higher-margin business, also at 54%, Additionally, 29% of investors cite underestimated synergies as among their top 3 reasons for liking the deal. No investorsfound overestimated revenue synergies to be one of the top 3 reasons to dislike the deal, and only 1 respondent viewed the dealto not be accretive. The results are fairly consistent across LOs and HFs, as these are the top 3 reasons to like a deal among both groups. The majordifference is the relative importance of these reasons: Among hedge funds, deal accretion is especially prominent at 77%, whilelong-only investors and current holders are more focused on Sysco’s entry in the higher-margin channel of cash and carry, at64%. On the other hand, the results are consistent between current shareholders and non-shareholders vary marginally: shareholdersplace a greater emphasis on the fact that the deal enables Sysco to enter in a faster growing, more resili