The world’s largest meal kit company just gobbled up a Chicago-area foodtech darling, as consumer demand for easy, heat-and-eat dinners rises during the COVID-19 pandemic.
On Monday, the Berlin-based HelloFresh announced it will pay $277 million to acquire the Batavia-based Factor75. HelloFresh said it will pay $177 million once the deal closes — which is expected in early 2021 — and another $100 million in “performance-based earn-outs and management incentives.”
Through the acquisition, HelloFresh will gain its second office in the United States — and first in the Chicago area — as well as Factor75’s four local production and fulfillment facilities. In the coming months, HelloFresh told the Chicago Tribune that it plans to open a new facility in Aurora that will give Factor75 the capacity to deliver more than $500 million in prepared meals annually, quintupling the Batavia company’s current revenue output. HelloFresh did not respond to an interview request from Built In.
“Direct-to-consumer ready-to-eat meals are a nascent food vertical that we believe has the potential to grow into a multi-billion-dollar category over time,” Uwe Voss, CEO of HelloFresh U.S., said in a statement.
Founded in 2013, Factor75 offers fresh, microwaveable meals that conform to a variety of diets, including keto, paleo, vegetarian and more. Factor75 expects to end the year with $100 million in revenue. Its acquisition expands HelloFresh’s current repertoire of meal kit companies beyond EveryPlate and Green Chef to include “a diverse and distinct meal offering for every need, occasion and price point,” HelloFresh said.
Factor75 CEO Mike Apostal said the acquisition will streamline the business operations and supply chains of both companies.
“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,” Apostal said in a statement.
Factor75 isn’t the only Chicago area meal kit company making moves, and just in time for Thanksgiving.
In early November, HomeChef announced it had partnered with NBC’s Peacock to provide a deal for both services. In June, Tovala raised $20 million to ship its prepackaged meals, and smart oven, in more home kitchens. In May, the Evanston-based Meez Meals told the Chicago Tribune that its sales had doubled during the pandemic.
