US retail giant Kroger has acquired Home Chef, the country’s largest meal-kit company.

The companies said the deal will “significantly accelerate availability of meal kits and position the combined company to lead the way in revolutionising how families shop for, prep, and cook their meals”.

The initial transaction price is US$200m and future earn-out payments of up to $500m over five years are contingent on achieving certain milestones, including significant growth of in-store and online meal kit sales. 

Home Chef’s recorded sales of $250m in 2017.

Yael Cosset, Kroger’s chief digital officer, said: “Customers want convenience, simplicity and a personalised 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.

“This merger will introduce Kroger’s 60m shoppers to Home Chef, enhance our ship-to-home and subscription capabilities, and contribute to Restock Kroger.”

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By GlobalData

Pat Vihtelic, Home Chef’s founder and CEO, said: “We’ve long believed that the future of our industry is omni-channel and bigger than just meal kits sold online. We want to be where our customers are and want to help make cooking at home easier, more accessible and even more enjoyable. 

“We’re thrilled that we will be part of the Kroger family and plan to maintain our relentless focus on innovation that meets customers’ evolving food needs. Kroger’s expansive retail footprint will allow us to serve millions of more customers across the country with simple, convenient and enjoyable meal solutions.”

The companies suggested Home Chef’s offerings complement Kroger’s Prep+Pared offering that is currently available in more than 525 stores.

Chicago-based Home Chef employs approximately 1,000 employees and operates three distribution centres in Chicago, Atlanta and San Bernardino.

Kroger said it expects the transaction to have no effect on 2018 earnings, and to be slightly accretive in 2019.