Benzinga | Nov 2, 2020 02:55PM EST

Nestle Buys Prepared Meal Delivery Service Freshly: What You Need To Know

Global food giant Nestle ADR (OTC:NSRGY) said Friday that it reached a deal to acquire Freshly, a fresh prepared meal delivery company.

What Happened: Freshly delivers fresh, chef-cooked meals to customers across the U.S. with a mission of "breaking down the barriers to healthy eating by delivering nutrition and convenience at scale."

The company, founded in 2015, will be integrated into Nestle's business as part of a deal that values it at $950 million.

Nestle, the world's largest food company, will pay Freshly up to $550 million in potential earnouts that are contingent on growth objectives.

Related Link: Fintech Focus For November 2, 2020

Why It's Important: Nestle bought a 16% stake in Freshly in 2017 as a "strategic move to evaluate and test" the food kit delivery market.

Years later, Freshly delivers more than 1 million meals per week and is expected to end 2020 with sales of $430 million.

"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," Nestl? USA Chairman and CEO Steve Presley said in a statement.

"Freshly is an innovative, fast-growing, food-tech startup, and adding them to the portfolio accelerates our ability to capitalize on the new realities in the U.S. food market and further positions Nestl? to win in the future."

What's Next: Nestle said it hopes to gain a "deep understanding" of what people want to eat at home and how they do so.

Freshly will bring its "highly specialized" consumer analytics capabilities and consumer analytics platform to help fuel growth opportunities across Nestle's entire business, according to the announcement.

Courtesy photo.