German meal kit provider expands its brand offerings in the US in a deal worth up to $277 million
Subsidiaries in the US of Berlin-headquartered HelloFresh have agreed to acquire Chicago-based meal kit provider Factor75, which operates in the US, Canada, the UK, Germany, the Netherlands, Belgium, Luxembourg, Austria, Switzerland, Sweden, France, Denmark, Australia and New Zealand.
The total purchase price is up to $277 million in cash, $177 million of which is payable upon the closing of the transaction, with an aggregate amount of up to $100 million structured as performance-based earn-out, guaranteed by HelloFresh, and management incentives.
Factor75 has been a portfolio company of Bluestein Ventures since 2016. “Factor is an incredible story of combining a best-in-class customer experience with operational excellence,” said Ashley Hartman, senior principal at Bluestein Ventures. “Factor deployed capital in a highly efficient manner to scale their innovative food delivery service that has become a daily feature in their customers’ diets,” she added.
Founded in 2013, Factor specialises in providing fresh, ready-to-eat meals with a focus on health and wellness. Its rotating menu of breakfast, lunch and dinner options feature keto, paleo, low-carb, vegetarian, plant-based and high-protein meals that can be heated in a microwave or oven. Factor’s US brand portfolio comprises HelloFresh, EveryPlate and Green Chef.
The acquisition provides HelloFresh with its first office in the Chicago metropolitan area, along with four production and fulfilment facilities.
A new facility, launching shortly, will provide capacity to deliver more than $500 million worth of prepared meals annually. Factor’s full-year revenue this year is expected to reach around $100 million.
Uwe Voss, chief executive of HelloFresh US, said: “Direct-to-consumer ready-to-eat meals are a nascent food vertical that we believe has the potential to grow into a multibillion-dollar category over time. With Factor, HelloFresh, EveryPlate and Green Chef, we have four high-growth food brands in our group, all benefiting from our strong growth engine, technology and supply chain infrastructure.”
Mike Apostal, chief executive of Factor, added: “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. By joining HelloFresh, the market leader in meal kits in the US, Factor will leverage new resources and category expertise to accelerate our growth, enhance our brand positioning and further amplify our mission.”
Rothschild & Co was exclusive financial advisor to Factor, and Kirkland & Ellis provided legal counsel to Factor. Sullivan & Cromwell acted as legal counsel for HelloFresh.
Date published: 23 November 2020