Family-owned food giant Mars Inc on Wednesday agreed to buy Kevin’s Natural Foods, which is known for its sous-vide meals, sauces, and side dishes, the companies said.
According to individuals familiar with the matter, private equity-backed Kevin’s is being valued at approximately $800 million in the deal. Earlier this year, Kevin’s initiated a process of exploring various options, including a potential sale of the company.
Mars, headquartered in McLean, Virginia, boasts three significant business divisions: Mars Petcare, Mars Snacking, and Mars Food & Nutrition. With an impressive annual revenue of around $48 billion, the company excels in each of these sectors.
Upon the completion of the deal, Kevin’s will function as an independent brand within the food and nutrition division.
Within the petcare sector, Mars manages renowned brands such as Pedigree, Whiskas, and Royal Canin. Furthermore, the company recently augmented its presence in this industry by acquiring Heska Corp, a veterinary equipment firm.
Renowned for its candy brands like M&M’s and Snickers, Mars has been actively pursuing a strategy of diversification and expansion in recent years. This includes a series of acquisitions aimed at strengthening its portfolio in the areas of healthy foods and snacking.
According to Shaid Shah, Global President of Mars Food & Nutrition, Mars has expressed its plans to continue expanding its food business through potential acquisitions in the near term. The company is actively seeking opportunities to enhance its presence in the food industry.
“We are trying to deliver on a mission we have to enable healthier and more flavorful diets for consumers worldwide, while Kevin’s is trying to empower the busiest people to eat clean without sacrificing flavors,” Shah said in an interview.
“What really inspired us about Kevin’s was their purpose and their passion for food,” he added.
Kevin’s, headquartered in Modesto, California, was established in 2019 by Co-Founders Dan Costa, Kelsie Costa-Olson, and Kevin McCray. The company garnered support from private equity firms TowerBrook Capital Partners and NewRoad Capital Partners, who joined as backers of the venture.
As part of the agreement, TowerBrook Capital Partners and NewRoad Capital Partners are divesting their ownership in Kevin’s. The transaction is anticipated to be finalized during the third quarter of 2023.
After being diagnosed with an autoimmune disorder, Kevin’s, the brainchild of McCray, was born with the intention of establishing a food brand that prioritized nutritious diets.
“Joining the Mars Food & Nutrition portfolio of brands will allow us to accelerate the development of more product innovations and support our mission of bringing Kevin’s to more consumers across markets,” McCray said.
Despite the overall subdued consumer deal volumes, the food and beverage sector has emerged as a comparatively thriving area for dealmaking in recent quarters. In a notable move, Unilever announced its acquisition of Yasso, a frozen yogurt brand in North America, just last month. Similarly, Flagstone Foods made a significant acquisition in May by purchasing Emerald Nuts from Campbell Soup Co. These strategic moves highlight the ongoing activity and interest within the food and beverage industry.
Mars sought financial guidance from Citi as their financial adviser, while Simpson Thacher & Bartlett, Covington & Burling, and ArentFox Schiff provided legal counsel. On the other side, Kevin’s enlisted the expertise of Wells Fargo Securities for financial advice and Sheppard Mullin for legal guidance.
