BATTLE CREEK, Mich., Oct. 6, 2017 /PRNewswire/ --
Kellogg Company (NYSE: K) today announced that it has entered into an agreement to acquire Chicago Bar Company LLC, maker of RXBAR, a line of clean-label protein bars made with delicious, whole food ingredients and the fastest growing nutrition bar brand in the United States. RXBAR will continue to operate independently as a standalone business, and will be able to leverage Kellogg's scale and resources to continue driving its growth.
"RXBAR is a unique and innovative company. Its values, people and cutting-edge approach represent an exciting opportunity for our business. Adding a pioneer in clean-label, high-protein snacking to our portfolio bolsters our already strong wholesome snacks offering. RXBAR is an excellent strategic fit for Kellogg as we pivot to growth," said Kellogg Company CEO Steve Cahillane. "With its strong millennial consumption and diversified channel presence including e-commerce, RXBAR is perfectly positioned to perform well against future food trends."
With a base of egg whites, fruit and nuts encased in iconic packaging, each RXBAR provides 12 grams of protein in 210-220 calories. RXBARs don't compromise on taste, nutrition, or convenience, making them great before and after workouts, in between meals, or as a quick, on-the-go breakfast. They are available in 11 different flavors, with additional seasonal and limited-time varieties, and are distributed in the U.S. The company also recently launched RXBAR Kids, which contain the same core ingredients as RXBARs, but in kid-friendly flavors and portions.
"We carefully considered who the right partner would be for RXBAR's future. We have always been committed to delivering the highest quality products that taste great, and being radically candid and transparent with our consumers, and these priorities remain. 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," said Peter Rahal, CEO and Co-Founder of RXBAR.
"The RXBAR team has built an incredible business, with impressive growth and profitability. Our focus will be on helping to drive the brand's continued growth," said Kellogg North America President Paul Norman. "We're excited to welcome the RXBAR team to Kellogg."
Financial Details of the Transaction
The acquisition by Kellogg is subject to customary closing conditions and is expected to close by the end of 2017. The purchase price is $600 million, or approximately $400 million net of tax benefits. Growing rapidly, RXBAR's net sales are expected to be approximately $120 million in 2017. We expect the multiple on projected 2018 EBITDA to be in the range of 12-14x, inclusive of the tax benefits to the purchase price. Excluding one-time costs, this acquisition is expected to be immaterial to EPS in 2017 and 2018.
Forward-Looking Statements Disclosure
The "forward-looking statements" contained herein inherently involve risks and uncertainties that could cause actual results to differ materially from those predicted in those statements, including the realization of the anticipated benefits from the acquisition of RXBAR, projections concerning the company's share repurchases, sales, operating profit and earnings, and the other factors discussed in the risk factors section of Kellogg Company's most recent annual report on Form 10-K. Investors are cautioned not to place undue reliance on any such forward-looking statements, which speak only as of the date they were made. The Company undertakes no obligation to update them publicly.
About Kellogg Company
At Kellogg Company (NYSE: K), we strive to make foods people love. This includes our beloved brands ? Kellogg's®, Keebler®, Special K®, Pringles®, Kellogg's Frosted Flakes®, Pop-Tarts®, Kellogg's Corn Flakes®, Rice Krispies®, Cheez-It®, Eggo®, Mini-Wheats® and more ? that nourish families so they can flourish and thrive. With 2016 sales of $13 billion and more than 1,600 foods, Kellogg is the world's leading cereal company; second largest producer of crackers and savory snacks; and a leading North American frozen foods company. And we're a company with a heart and soul, committing to help create 3 billion Better Days by 2025 through our Breakfasts for Better Days global purpose platform. To learn more, visit www.KelloggCompany.com or www.OpenforBreakfast.com and follow us on Twitter @KelloggCompany, YouTube and on our Social K corporate blog.
SOURCE Kellogg Company
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