Kroger Agrees To Buy Maker Of Meal Kits Home Chef
Kroger Co. (KR) said that it agreed to buy Home Chef, the country's largest private meal kit company. The initial transaction price is $200 million and future earnout payments of up to $500 million over five years are contingent on achieving certain milestones, including significant growth of in-store and online meal kit sales.
Home Chef employs about 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% of all continental U.S. households within a two-day delivery window.
After the deal closes, Home Chef will operate as a subsidiary of The 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.Kroger expects the transaction to have no effect on 2018 earnings, and to be slightly accretive in 2019.
The transaction is expected to close in the second quarter, following the satisfaction of customary closing conditions, including regulatory approval. (dpa)
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