Italian pasta maker Barilla paid $750 million in cash for Goodles, a healthier macaroni-and-cheese brand, according to a person familiar with the negotiations. The deal, announced in early September, closed this week. The purchase price is 28 times what Goodles had raised in funding rounds, making dozens of employees millionaires.
Barilla also agreed to a nine-figure payout if Goodles hits performance targets. Goodles had $190 million in net sales in the 12 months prior to the deal’s close. Barilla stated it was pleased the acquisition had closed and declined to comment on financial details.
Goodles will continue to operate as a standalone brand under its current leadership, with co-founder Jen Zeszut remaining at the helm. The company plans to retain all employees. Goodles’ neon-colored boxes, higher protein content, and upscale flavors like Gouda and Hatch chile have helped it win market share from Kraft Heinz Co.’s iconic blue boxes, despite a higher price point.
Zeszut aims to prove skeptics wrong that Goodles will maintain its quality and passionate fandom after joining a larger corporation. Joining Barilla will enable Goodles to expand in the US and eventually internationally. Genevieve Gilbreath, co-founder of Springdale Ventures, which invested $750,000 early on, still sees room for growth in the US.
She noted the category was ripe for disruption, with Goodles challenging both Kraft Heinz and Annie’s mac & cheese, now owned by General Mills Inc. Zeszut met Barilla executives late last year at a Formula One race in Las Vegas, but no deal was discussed then. Barilla approached Goodles independently this summer. Smaller food startups have been driving much of the industry’s growth, as consumers seek healthier options with shorter, simpler ingredient lists.
Within categories like frozen meals, yogurt, and nut butters, less-processed options are selling better than more highly-processed products by an average of roughly 7 percentage points, according to a June analysis from BNP Paribas. Gilbreath emphasized that big companies struggle to innovate and create genuine brand love. Springdale Ventures also invested in Beat Box, a ready-to-drink alcoholic beverage brand, which Anheuser-Busch purchased an 85% stake in earlier this year.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing