Kellogg Company (NYSE:K) is buying the maker of RXBAR protein bars for $600 million.
The deal will have Kellogg Company taking over Chicago Bar Company. However, the maker of RXBAR protein bars will continue to operate independent following the completion of the transaction.
Kellogg Company notes that the deal will be good for Chicago Bar Company because it will give it access to K’s resources. This is turn will likely allow the company to grow and reach a broader range of consumers. Kellogg notes that RXBAR is already the fastest-growing nutrition bar brand in the U.S.
Kellogg Company points out that the deal’s value will be $400 million once tax benefits are taken into account. It also says that it expects the acquisition to be immaterial to its earnings in 2017 and 2018, when excluding the one-time cost.
“RXBAR is an excellent strategic fit for Kellogg as we pivot to growth,” Steve Cahillane, the CEO of Kellogg Company, said in a statement. “With its strong millennial consumption and diversified channel presence including e-commerce, RXBAR is perfectly positioned to perform well against future food trends.”
Kellogg Company says that it still needs to complete customary closing conditions before it can finish its acquisition of Chicago Bar Company. So long as everything goes well, the two companies are expecting the deal to close by the end of the year.
K stock was largely unaffected by the acquisition news as of Friday afternoon and is down 14% year-to-date.
More From InvestorPlace
As of this writing, William White did not hold a position in any of the aforementioned securities.
The post Kellogg Company (K) Buys Protein-Bar Company RXBAR in $600 Million Deal appeared first on InvestorPlace.