US food giant Kellogg has added to its wholesome snacks offering with the acquisition of RXBAR protein bar maker Chicago Bar Company for US$600m.
RXBAR, said by Kellogg to be the “fastest-growing nutrition bar brand” in the US, is a line of ‘clean-label’ protein bars with a base of egg whites, fruit and nuts.
Kellogg, best known for breakfast cereals such as Special K, said post-deal RXBAR will continue to operate independently as a stand-alone business, and will be able to leverage Kellogg’s scale and resources to drive growth.
Kellogg’s newly-appointed CEO, Steve Cahillane, said: “RXBAR is a unique and innovative company. Its values, people and cutting-edge approach represent an exciting opportunity for our business.
“Adding a pioneer in clean-label, high-protein snacking to our portfolio bolsters our already strong wholesome snacks offering. RXBAR is an excellent strategic fit for Kellogg as we pivot to growth.
“With its strong millennial consumption and diversified channel presence including e-commerce, RXBAR is perfectly positioned to perform well against future food trends.”
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Peter Rahal, CEO and co-founder of RXBAR, said: “We carefully considered who the right partner would be for RXBAR’s future. We have always been committed to delivering the highest quality products that taste great, and being radically candid and transparent with our consumers, and these priorities remain.
“Joining Kellogg is not only a great cultural fit, but it provides us with the tools and resources to accelerate our growth so the brand can scale even faster than it is today.”
Each RXBAR provides 12 grams of protein and 210-220 calories. The bars are available in 11 different flavours, with additional seasonal and limited-time varieties, and are distributed throughout the US.
Chicago Bar Company also recently launched RXBAR Kids, which contain the same core ingredients as RXBARs, but in “kid-friendly” flavours and portions.
RXBAR’s net sales are expected to be approximately US$120m in 2017 and Kellogg said it expects the multiple on projected 2018 EBITDA to be in the range of 12-14x, inclusive of the tax benefits to the purchase price.
Kellogg said excluding one-time costs the acquisition is expected to be immaterial to EPS in 2017 and 2018.