HelloFresh To Spend Up To $277M For Meal Company Factor75
The press release says the total purchase amount includes $177 million payable when the transaction is done, alongside another $100 million as a “performance-based earn-out” guaranteed by HelloFresh.
Factor75 was founded in 2013 and specializes in “providing fresh, ready-to-eat meals with a focus on health and wellness,” with options for Keto, Paleo, low-carb, vegetarian and high-protein meals.
The merger will combine HelloFresh’s global work to deliver fresh ingredients to customers’ doorsteps with Factor’s previous success in creating ready-to-eat meals.
HelloFresh’s addition of Factor to its portfolio will join the existing additions of EveryPlate and Green Chef, to access “a diverse and distinct meal offering for every need, occasion and price point,” the release says.
“Since our founding, Factor has been at the intersection of taste, health, and convenience, providing simple, clean eating that not only tastes great but fuels consumers’ active and busy lifestyles,” said Mike Apostal, CEO of Factor. “By joining HelloFresh, the market leader in meal kits in the U.S., Factor will leverage new resources and category expertise to accelerate our growth, enhance our brand positioning and further amplify our mission.”
In addition, Uwe Voss, CEO of HelloFresh U.S., said the ready-to-eat meals delivered directly to customers were “a nascent food vertical that we believe has the potential to grow into a multi-billion dollar category over time.”
The acquisition will land HelloFresh a new office in the Chicago metropolitan area, and four new production and fulfillment facilities, the press release says.
Customers’ appetite for meal kit services has grown larger since the pandemic started, with the industry projected to reach a value of $20 billion by 2027, PYMNTS reports. Julie Marchant-Houle, CEO of Martha & Marley Spoon, told PYMNTS recently that the large increases in revenue for these types of companies came from the lockdowns, when customers couldn’t access restaurants like before the pandemic.
Meal kits have seen an increase in use and demand in the pandemic because of their extra costs for shipping, recipe creation and packaging, PYMNTS writes.