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.
The deal values private equity-backed Kevin's at nearly $800 million, according to people familiar with the matter. Kevin's started exploring options, which included a sale of the company, earlier this year.
McLean, Virginia-based Mars, which generates about $48 billion in annual sales, has three major businesses - Mars Petcare, Mars Snacking, and Mars Food & Nutrition.
After the deal is completed, Kevin's will operate as a standalone brand under the food and nutrition unit.
In petcare, Mars operates brands like Pedigree, Whiskas, and Royal Canin, and it recently expanded its footprint in the sector through the acquisition of veterinary equipment firm Heska Corp.
Mars, which is widely known as the maker of candy brands like M&M's and Snickers, has made a series of acquisitions in recent years as part of its efforts to diversify and build out its categories focused on healthy foods and snacking.
Mars plans to grow its food business through more potential acquisitions in the near term, said Shaid Shah, global president at Mars Food & Nutrition.
"We are trying to deliver on a mission we have to enable more 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.
Modesto, California-based Kevin's, which counted private equity firms Towerbrook Capital Partners and NewRoad Capital Partners among its backers, was co-founded in 2019 by Dan Costa, Kelsie Costa-Olson, and Kevin McCray.
McCray launched Kevin's after he was diagnosed with an autoimmune disorder, as he wanted to build a food brand that focused on healthy 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.
The food and beverage sector has been a relatively bright spot for dealmaking in recent quarters, even as overall consumer deal volumes remain muted. Unilever last month said it would buy frozen yogurt brand Yasso in North America, while Flagstone Foods acquired Emerald Nuts from Campbell Soup Co in May.
Citi served as financial advisor to Mars and Simpson Thacher & Bartlett, Covington & Burling and ArentFox Schiff acted as legal advisers to the company. Wells Fargo Securities and Sheppard Mullin advised Kevin's.