By Kimberly Chin

 

Nestlé USA has acquired meal-kit delivery service Freshly Inc. in a deal valued at $950 million, as the company looks to extend its reach into consumer homes.

The company behind Coffeemate, DiGiorno and Nestlé Toll House will also potentially provide up to $550 million in earnouts if certain growth goals are met, Nestlé said. The deal was completed Friday.

Nestlé bought a roughly 16% stake in the upstart in 2017 to "evaluate and test the burgeoning market," in meal-kit preparation and delivery, the company said. The transaction will help it jump on the "new realities" taking shape in the U.S. food market following the coronavirus pandemic, the company said.

"Consumers are embracing e-commerce and eating at home like never before. It's an evolution brought on by the pandemic but taking hold for the long term," Nestlé USA Chief Executive and Chairman Steve Presley said.

Freshly's sales are projected to reach $430 million this year, Nestlé said.

Freshly, founded in 2015, prepares fresh, chef-cooked meals for customers through a weekly subscription service.

 

Write to Kimberly Chin at kimberly.chin@wsj.com

 

(END) Dow Jones Newswires

October 30, 2020 14:54 ET (18:54 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.
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