Kroger Co. is buying Home Chef, the country’s largest private meal kit company, in deal that could reach $700 million, according to the Cincinnati-based grocery chain.
The initial transaction price is $200 million and future payments of up to $500 million over five years are contingent on achieving certain sales goals, the company said.
The pending merger comes on the heels of Home Chef’s 150 percent growth in 2017, $250 million in revenue, and two profitable quarters, according to Kroger.
“Customers want convenience, simplicity and a personalized food experience. Bringing Home Chef’s innovative and exciting products and services to Kroger’s customers will help make meal planning even easier and mealtime more delicious,” said Yael Cosset, Kroger’s chief digital officer. “This merger will introduce Kroger’s 60 million shoppers to Home Chef, enhance our ship-to-home and subscription capabilities, and contribute to Restock Kroger.”
Home Chef employs approximately 1,000 employees, is headquartered in downtown Chicago, and operates three distribution centers in Chicago, Atlanta and San Bernardino. Home Chef’s distribution centers reach 98 percent of all continental U.S. households within a two-day delivery window, according to the company.
“We’ve long believed that the future of our industry is omni-channel and bigger than just meal kits sold online. We want to be where our customers are and want to help make cooking at home easier, more accessible and even more enjoyable,” said Pat Vihtelic, Home Chef’s founder and CEO. “
After the deal closes, Home Chef will operate as a subsidiary of Kroger Co., maintain its e-commerce business on homechef.com, and assume responsibility for Kroger’s meal solutions portfolio. The company will continue to operate its offices and facilities.
Following closing, Kroger will make Home Chef meal kits available to Kroger shoppers, both in stores and online.
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