Lou Whiteman

It gives it a major efficiency advantage over its competitors.

On the other hand, Restaurant Depot, it's a network of in-person wholesale restaurant supply warehouses.

Think of it as like a Costco or a Sam's Club, but specifically for restaurants.

It's carved out a very nice niche among restaurant owners who value flexibility in pricing over the convenience of the national distributor, Cisco.

There have been a few decent examples of deals like this that have worked.

Performance Food Group, getting back to the Cisco situation, is one that looks really interesting.

Ticker symbol is PFGC.

Between 2019 and 2023, it acquired three of its major competitors, including Cheney Brothers, which is a big Cisco competitor.

A major reason was to add new consumer segments, which is one of the reasons Cisco is acquiring Restaurant Warehouse.

The stock is up 160% since the start of 2019.

I'd call that a pretty solid example and a pretty close parallel.

But I completely see your point.

There is a lot that can go wrong with these types of acquisitions, especially when a company like Cisco is taking on $21 billion of new debt to make it happen.

Yeah, that's a really good question.

As you mentioned, they're a clinical-stage pharmaceutical.

They develop treatments for rare diseases.

It's not just narcolepsy.

They have some other things in the pipeline, but that's their most promising candidate.

They have a product that's in later-stage trials.

Phase II trial data was very promising.