KKR & Co. Inc. agreed to buy $500 million in convertible preferred stock of US Foods Holding Corp.

The newly issued stocks carry a 7% dividend payable in kind in its first year and in cash or in kind, at US Food's discretion, thereafter.

The preferred stock will be converted into US Foods common stocks for $21.50 per share. On an as-converted basis, the preferred stock will represent roughly 9.6% of pro forma common shares outstanding.

KKR, which is a returning shareholder of US Foods, will make the investment through its KKR Americas Fund XII LP fund.

US Foods expects to appoint Nate Taylor, partner and co-head of Americas private equity at KKR, as a new board director.

Additionally, US Foods said it expects to close the acquisition of Smart Foodservice Warehouse Stores on April 24.

US Foods tapped Centerview Partners LLC and Evercore as financial advisers, and Cravath Swaine & Moore LLP as legal adviser. Simpson Thacher & Bartlett LLP advised KKR.