HF Foods Group Announces Agreement to Acquire Chicago Distribution Facility
Rhea-AI Summary
HF Foods Group (NASDAQ: HFFG), a leading distributor of international foodservice solutions to Asian restaurants, has announced a binding purchase agreement to acquire its currently leased distribution facility in Chicago, Illinois. The facility, which HF Foods has been leasing since acquiring Great Wall Seafood in 2022, represents a strategic move in the company's transformation plan.
The acquisition will be supported by HF Foods' recently announced At-the-Market (ATM) equity offering program, which will provide additional liquidity for working capital, capital expenditures, and potential future acquisitions. The company expects this strategic move to reduce facility costs, improve operational efficiency, and strengthen organic growth through cross-selling opportunities in the Midwest region.
Positive
- Early exit from lease agreement will improve operating expenses
- Acquisition enables investment in facility expansion and capacity growth
- Strategic enhancement of Midwest distribution footprint
- New ATM program provides financial flexibility for future acquisitions
- Expected improvements in operational control and logistics efficiency
Negative
- Potential shareholder dilution from ATM equity offering program
- Capital expenditure requirements for facility acquisition and improvements
Insights
HF Foods' Chicago facility acquisition reduces costs, increases capacity, and strategically positions for Midwest expansion with ATM program supporting future investments.
HF Foods Group's acquisition of their previously-leased Chicago distribution facility represents a strategic vertical integration move that should yield multiple financial benefits. By purchasing rather than leasing this critical Midwest distribution hub, the company can eliminate recurring lease expenses and gain complete operational control over a facility they've operated since acquiring Great Wall Seafood in 2022.
This transaction aligns perfectly with HFFG's transformation strategy focused on operational efficiency and cost reduction. The specialized Asian food distribution business requires substantial infrastructure investments, and owning rather than leasing provides both immediate operating expense improvements and long-term capacity expansion opportunities.
The timing connects strategically with their recent At-the-Market (ATM) equity offering program, which creates a financing mechanism for this and potentially similar future acquisitions. This flexible capital-raising approach allows HFFG to opportunistically fund strategic acquisitions without the transaction costs associated with traditional secondary offerings.
For the Midwest region specifically, this move demonstrates HFFG's commitment to strengthening its competitive position in a key market. The Chicago facility serves as a cornerstone distribution hub for their specialized Asian restaurant customers throughout the Midwest. Owning this facility gives HFFG enhanced control over their distribution infrastructure, potentially improving service levels while simultaneously reducing their cost structure – a rare combination that could drive margin expansion in a traditionally low-margin distribution business.
With complete facility control, HFFG can now implement tailored facility improvements, optimize logistics operations, and potentially consolidate additional operations into this strategic hub – all supporting their long-term regional expansion strategy.
Strategic development expected to reduce facility costs, expand capacity and support long-term growth
Acquisition follows HF Foods’ establishment of an At-the-Market equity offering program to provide liquidity for, among other items, capital expenditures, and possible acquisitions or business expansion
LAS VEGAS, Sept. 29, 2025 (GLOBE NEWSWIRE) -- HF Foods Group Inc. (NASDAQ: HFFG) (“HF Foods” or the “Company”), a leading distributor of international foodservice solutions to Asian restaurants and other businesses across the United States, announced today it has entered into a binding purchase agreement for a distribution facility located in Chicago, Illinois. HF Foods previously leased the facility following its acquisition of Great Wall Seafood in 2022.
This acquisition advances HF Foods’ ongoing transformation plan to improve operational efficiency, reduce facility costs and strengthen organic growth through cross-selling opportunities. Acquiring the facility enables HF Foods to exit the lease agreement early, improve operating expenses, and invest in the facility to grow additional capacity and drive consolidation opportunities. The Company believes its previously announced At-the-Market (ATM) equity offering program will provide financial flexibility to expedite investments such as the Chicago warehouse acquisition to drive further growth. The ATM program is expected to provide the Company additional liquidity for, among other items, working capital, capital expenditures, and possible acquisitions or business expansion.
“As we continue to successfully execute on our ongoing transformation plan, this acquisition represents another key milestone in better positioning HF Foods for future growth,” said Felix Lin, President and Chief Executive Officer of HF Foods. “This facility has been a key cornerstone of our Midwest distribution footprint, and over the next several years, we expect to further expand our presence in this important region. This acquisition is also well timed following the establishment of our ATM program. We believe the ATM program will provide additional financial flexibility to help us pursue similar acquisitions in the future to expand the business, enhance our capabilities and grow our national network.”
In addition, this acquisition deepens HF Foods’ commitment to the Chicago region and creates important opportunities that are expected to yield long-term benefits to HF Foods’ local restaurant customers in the Chicago and Midwest region by improving operational control, enhancing logistics, reducing facility costs and driving long-term margin growth.
About HF Foods Group Inc.
HF Foods Group Inc. is a leading marketer and distributor of fresh produce, frozen and dry food, and non-food products to primarily Asian restaurants and other foodservice customers throughout the United States. HF Foods aims to supply the increasing demand for Asian American restaurant cuisine, leveraging its nationwide network of distribution centers and its strong relations with growers and suppliers of fresh, high-quality specialty restaurant food products and supplies in the US and Asia. Headquartered in Las Vegas, Nevada, HF Foods trades on Nasdaq under the symbol “HFFG”. For more information, please visit www.hffoodsgroup.com.
Forward-Looking Statements
All statements in this news release other than statements of historical facts are, or may be deemed to be, “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and contain our current expectations about our future results. We have attempted to identify any forward-looking statements by using words such as “aims,” “continues,” “expects,” “plans,” “will,” and other similar expressions. Although we believe that the expectations reflected in all of our forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Such statements are not guarantees of future performance or events and are subject to known and unknown risks and uncertainties that could cause the Company’s actual results, events or financial positions to differ materially from those included within or implied by such forward-looking statements. Such factors include, but are not limited to, risks relating to our ability to consummate our operational transformation plan as anticipated, risks relating to the impact of our operational plan on our sales and efficiencies, risks relating to the impact of demographic trends on demand for the products we distribute, risks related to potential increases in tariff-related costs, statements of assumption underlying any of the foregoing, and other factors including those disclosed under the caption “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024 and other filings with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date made. Except as required by law, we undertake no obligation to disclose any revision to these forward-looking statements.
This news release shall not constitute an offer to sell or a solicitation of an offer to buy, nor will there be any sale of securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.
Contact:
ICR
Investors: Anna Kate Heller
Media: Michael Wolfe
hffoodsgroup@icrinc.com
FAQ
What facility did HF Foods Group (HFFG) agree to acquire in September 2025?
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