US subsidiaries of HelloFresh SE, entered into an agreement to acquire all of the outstanding equity interests of Factor75, Inc. HelloFresh is a provider of meal kits in the world and in the US. Factor is a leading provider of fully-prepared, fresh meals that combine health, convenience and restaurant-quality taste.
The acquisition marks the next step in HelloFresh’s growth plan in the US to strengthen its position and to expand its total addressable market. The total purchase price for the acquisition is up to $277 million in cash, subject to customary purchase price adjustments. Of that amount, $177 million is payable upon the closing of the transaction and an aggregate amount of up to $100 million is structured as performance-based earn-out, guaranteed by HelloFresh, and ongoing management incentives.
This acquisition brings together HelloFresh’s global market expertise in delivering fresh ingredients to customers’ doorsteps across 14 countries with Factor’s proven success in ready-to-eat meals. Both companies share a strong vision for operational excellence and a data-driven approach to delight customers with great meals consumed at home.
Acquisition allows HelloFresh to tap into new customer segments and increase capacity
HelloFresh will gain its first office in the Chicago metropolitan area, along with four production and fulfillment facilities. A new facility, which will be launched in the near future, will provide capacity to deliver more than $500 million worth of prepared meals annually. Factor’s full year revenue for 2020 is expected to reach around $100 million. Due to the complementary nature in product offerings, the acquisition of Factor will drive supply chain and operational synergies for both companies.
Founded in 2013, Factor specializes in providing fresh, ready-to-eat meals with a focus on health and wellness. Factor’s 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 the microwave or oven and are ready in minutes. With the addition of Factor to its existing US brand portfolio - comprised of HelloFresh, EveryPlate and Green Chef - customers will benefit from a diverse and distinct meal offering for every need, occasion and price point.
The closing of the transaction is subject to customary conditions precedent, including expiry of the waiting period under the US Hart-Scott-Rodino Antitrust Improvements Act and the approval of the transaction by the majority of Factor’s shareholders, and is currently expected to occur within the next months. Rothschild & Co. served as exclusive financial advisor to Factor, and Kirkland & Ellis provided legal counsel to Factor. Sullivan & Cromwell acted as legal counsel for HelloFresh.