The Kroger Co. finalized a merger with meal delivery company Home Chef this week as the Cincinnati-based company seeks to speed up growth in the meal kit market.
Home Chef will operate as a Kroger subsidiary and will assume responsibility for the grocer’s meal kit initiatives. Home Chef meal kits will now be featured in Kroger’s portfolio of stores and will remain available online.
The initial transaction price is $200 million, with future earnout payments of up to $500 million over five years, contingent on milestones including significant growth of in-store and online meal kits, according to Kroger. Home Chef grew 150 percent in 2017, earning $250 million in revenue and delivering profit in two quarters, the company said.
“We couldn’t be more excited to join the Kroger family and for what this will mean for millions of customers,” said Pat Vihtelic, Home Chef founder and chief executive, in a statement. “We look forward to bringing Home Chef’s simple, convenient and enjoyable meal solutions to Kroger locations.”
Home Chef, founded in 2013, is headquartered in Chicago and operates a distribution center there, as well as in Atlanta and Los Angeles. The company employs about 1,000 people.