Our 'B+' rating on KeHE Distributors Holdings LLC is derived from: Our anchor of 'bb-', based on our "weak" business risk and "significant" financial risk profile assessments for the company. The comparable rating analysis modifier had a negative one-notch impact on the rating outcome. Niche player in the highly competitive wholesale grocery distribution industry with focus on the specialty segment; Good growth prospects of the specialty food distribution, including natural and organic segments; and Meaningful customer concentration--the two largest customers account for 25% of sales. Significant debt leverage because of debt incurred to fund acquisitions; KeHE could continue to pursue modest sized acquisitions to enhance its market position; and Employee Stock Ownership Plan (ESOP) ownership structure could result in increased
