Two weeks after a $1.8 billion deal fell apart, Blackstone Group now has its second deal of the year and its second in food distribution.

Performance Food Group Company says it will be acquired by an affiliate of Blackstone Group and New York-based Wellspring Capital Management in a deal valued at about $1.3 billion.
 
Under the terms of the agreement, Performance Food Group shareholders will receive $34.50 per share, a premium of 33.4 percent over the average closing price for the past 30 trading days, and 42.6 percent over yesterday's closing price of $24.19.

The deal comes a little more than two weeks after mortgage and vehicle-fleet company PHH announced it would scrap its $1.8 billion sale to GE Capital and Blackstone, after Blackstone failed to line up the necessary financing from advising and underwriting banks J.P. Morgan and Lehman Brothers.

The failed transaction resulted in a $50 million termination fee from Blackstone, and stoked worries about the future of the private equity business amid tight credit conditions.

The announcement of the Performance Foods deal makes clear that "the transaction is not subject to any financing condition to the obligations of Blackstone and Wellspring."

Blackstone and Wellspring have engaged Wachovia, Goldman Sachs, and Credit Suisse as financial advisers. Should the deal with Performance Food Group fail to close, Blackstone and Wellspring are obligated to pay a $40 million breakup fee. The company will also solicit superior proposals from third parties during the next 50 days.

The transaction will be structured as a combination of Performance Food Group and Vistar Corporation, a food-service distributor controlled by affiliates of Blackstone and Wellspring.

Performance Food Group markets and distributes food products to restaurants, hotels, cafeterias, schools, health-care facilities, and other institutions.

Vistar is a food vendor specializing in the Italian, pizza, vending, office-coffee, and theater markets. Blackstone bought a majority stake in Vistar in September for $400 million.

Last week, Blackstone acquired GSO Capital Partners, a hedge fund that specializes in leveraged finance, in a deal that could be worth as much as $930 million.

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