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Friday, 06 October 2017 10:28

Kellogg to acquire Chicago-based RXBAR in $600 million deal

Written by  MiBiz Staff
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Kellogg to acquire Chicago-based RXBAR in $600 million deal COURTESY PHOTO

BATTLE CREEK — Kellogg Co. is bolstering its product portfolio with the acquisition of a protein bar manufacturer.

The Battle Creek-based Kellogg has entered into an agreement to acquire Chicago-based Chicago Bar Co., the maker of RXBAR, for $600 million, or $400 million net of tax benefits, according to a statement.

RXBAR sales are expected to reach $120 million this year year. The deal value is estimated at 12-14 times RXBAR’s 2018 EBITDA (earnings before interest, taxes, depreciation and amortization), including the tax benefits, the company said.

Excluding one-time charges related to the transaction, Kellogg anticipates the deal to be immaterial to its earnings per share this year and in 2018.

The deal is expected to close by the end of 2017, after which RXBAR will continue to operate as a standalone company.

“Adding a pioneer in clean-label, high-protein snacking to our portfolio bolsters our already strong wholesome snacks offering,” Kellogg CEO Steve Cahillane said in a statement. “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.”

RXBAR makes whole-ingredient protein bars that are distributed in the U.S. The producer also recently launched the RXBAR Kids division.

“We carefully considered who the right partner would be for RXBAR’s future,” RXBAR cofounder and CEO Peter Rahal said in a statement. “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.”

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