In a deal that marries two diet crazes, maker of a low-carb line of Atkins products, Simply Good Foods Co., picked up El Segundo-based Quest Nutrition for $1 billion.
Simply Good will buy the privately held company in an all-cash deal that should close by the end of the year, the companies announced on Aug. 21.
With a line of ready-to-eat protein bars, cookies and chips, Quest does about $345 million in sales. The move would diversify Good Foods' line up — which is heavily dependent on an out-of-style diet fad — and provide the Colorado-based food company access to Quest's more robust ecommerce strategy.
“This combination delivers on our strategy to become a broader nutritional snacking company that offers consumers a broad range of brands and products that satisfy their nutritional needs,” Joseph Scalzo, Simply Good Foods' chief executive, said in a statement.
Quest, founded in 2010, underwent restructuring two years ago when it laid off 524 workers at manufacturing plants in the City of Industry and Walnut. The company, which markets to the fitness industry, shifted its manufacturing and distribution to third-parties — similar to the strategy Good Foods employs.
The two companies estimate folding the enterprises together could help save $20 million and combined net sales would total $800 million.
Manufacturing, retail and trade reporter Rachel Uranga can be reached at firstname.lastname@example.org or (323) 556-8351. Follow her on Twitter @racheluranga.
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