Kellogg Company (NYSE: K) announced on Friday that it has entered into an agreement to acquire RXBAR Through the agreement RXBAR will operate independent as a standalone business, but it will continue to bolster Kellogg’s earnings growth.
RXBAR is a line of clean-label protein bars made with whole food ingredients. Ingredients include egg whites, fruits, and nuts. The bar delivers 12 grams of protein and 210-220 calories.
"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."
Peter Rahal, CEO and co-founder of RXBAR, started off the company as a door to door business now it has boomed across the nation, as products are shelved at stores such as Whole Foods, Target, as well as online shopping.
Growing rapidly, RXBAR is expected to reported net sales of approximately $120 million for fiscal year 2017.
"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.
In the second quarter, Kellogg reported $3.2 billion in net sales, but it was 2.5 percent down year over year for the same quarter. The company said the weaker sales were due to lower consumption in the U.S. and reduced merchandising activity in Europe.
RXBAR is also the fastest growing nutrition bar brand in the U.S. With the acquisition, it would expand Kellogg’s portfolio and offer consumers more variety.
The agreement is expected to close by the end of 2017.