The Kroger Co. (NYSE: KR) and Home Chef, the country’s largest private meal kit company, today finalized a deal that will make Home Chef the newest addition to the Kroger family of companies. The deal will significantly accelerate the availability of meal kits and position the combined company to lead the way in revolutionizing how families shop for, prep, and cook their meals.
“We’re excited to welcome Home Chef to The Kroger Family of Companies,” says Rodney McMullen, Kroger’s chairman and CEO. “The merging of our two innovative, data-driven, and customer-focused cultures will allow us to accelerate our reach across America, serving food inspiration and uplift.”
“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’s founder and CEO. “We look forward to bringing Home Chef’s simple, convenient and enjoyable meal solutions to Kroger locations.”
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. The merger comes on the heels of Home Chef’s 150% growth in 2017, $250M in revenue, and two profitable quarters.
“As one of the fastest growing meal kit companies in the country, Home Chef is poised for even more explosive growth,” said Mr. Cosset. “We admire their focus on the customer, culture of collaboration, dynamic experimentation, and demonstrated financial success. Home Chef’s combination of culinary expertise and a customer data driven decision-making process is right in line with Kroger’s vision to serve America through food inspiration and uplift by providing meal solutions for every lifestyle.”
After the deal closes, Home Chef will operate as a subsidiary of Kroger while maintaining its online presence at homchef.com. Home Chef will continue to operate its own offices and facilities.
Kroger customers can expect to see Home Chef meal kits online and in stores following the closing.
“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.”
Kroger will make Home Chef meal kits available to customers, both in stores and online.
Kroger expects the transaction to have no effect on 2018 earnings, and to be slightly accretive in 2019.