According to Business Insider, Blue Apron’s shares were up more than 5 percent on Thursday (May 24) after Kroger announced that it will acquire Home Chef, the country’s largest private meal kit company.
The anticipated merger comes on the heels of Home Chef’s 150 percent growth in 2017, $250 million in revenue and two profitable quarters. The initial transaction price is $200 million, and future earnout payments of up to $500 million over five years are contingent on achieving certain milestones.
“Customers want convenience, simplicity and a personalized food experience. Bringing Home Chef’s innovative and exciting products and services to Kroger’s customers will help make meal planning even easier and mealtime more delicious,” said Yael Cosset, Kroger’s chief digital officer. “This merger will introduce Kroger’s 60 million shoppers to Home Chef, enhance our ship-to-home and subscription capabilities, and contribute to Restock Kroger.”
Home Chef will continue to operate as a subsidiary of Kroger, maintain its eCommerce business and continue to operate its offices and facilities. Once the deal closes, Home Chef meal kits will be available to Kroger shoppers, both in stores and online.
Blue Apron shares have lost almost 70 percent of their value since the company went public last year, and the company is down more than 22 percent this year. Analysts have suggested that Blue Apron's best hope would be to be acquired, with one analyst suggesting that Walmart might be the best suitor.
“Like its $310 million purchase of Bonobos, buying Blue Apron would repeat Walmart’s playbook of acquiring a branded eCommerce startup with a more premium product to its core offerings,” Matthew Trusz of Gabelli & Company wrote in a note to investors. “Further, Walmart could put Blue Apron’s meal kits into its physical stores, which we believe would meaningfully enhance Blue Apron’s profitability (more scale, less packaging).”