Kellogg Co. is buying the upstart company behind protein bar maker RXBar for $600 million, just days after the cereal company hired a former vitamin executive as CEO.
Publicly traded Kellogg (K), best known for Frosted Flakes and Pop-Tarts, has struggled to make its cereals and snacks more appealing to Americans who want to avoid sugary processed foods. Its revenue has suffered, falling every year since 2013.
RXBar says its bars are made with egg whites, fruits and nuts, and exclude dairy, soy or gluten. "No B.S," as RXBar's distinctive packaging states.
Crain's Chicago Business reports that only four years ago Peter Rahal was making protein bars in his parents' kitchen in Glen Ellyn, Illinois, with the help of his childhood friend Jared Smith. On Friday they sold their company, RXBar maker Chicago Bar Co., for a once-unimaginable $600 million.
"We couldn't have dreamed of this opportunity," Rahal, 31, told Crain's. "We started with $10,000 dollars. We didn't go to investors. We just f---ing did it."
Last week, Kellogg Co. hired new CEO Steven Cahillane from vitamin seller Nature's Bounty Co. as it seeks to offer healthier packaged foods. The Battle Creek, Michigan-based company said Friday it expects the $600 million deal for Chicago Bar Co. to be completed by the end of the year.