Kellogg Co. (NYSE: K) has agreed to acquire protein bar maker RXbar for about $600 million. The addition of Rxbar will help Kellogg appeal to consumers who demand healthy convenient snacks.

"With its strong millennial consumption and diversified channel presence including e-commerce, Rxbar is perfectly positioned to perform well against future food trends," says Kellogg CEO Steve Cahillane. Rxbar expects to finish 2017 with around $120 million in sales.

Chicago-based Rxbarmakes nutrition bars mostly with egg whites and nuts that come in 11 different flavors in addition to seasonal items, such as pumpkin spice. "Joining Kellogg is not only a great cultural fit, but it provides us with the tools and resources to accelerate our growth so the brand can scale even faster than it is today," adds Rxbar co-founder Peter Rahal.

Kellogg, headquartered in Battle Creek, Michigan, is known for producing cereals and snacks under the Corn Flakes, Frosted Flakes, Pop-Tarts and Mini-Wheats brands. The company has been growing through acquisitions. For instance, in 2016, Kellogg announced plans to buy Brazilian biscuits maker Parati Group. And in 2015, the company bought Egyptian cereal producer Mass Food Group.

Buyers are actively chasing snack companies. Some recently deals include: B&G Foods Inc.'s (NYSE: BGS) acquisition of Back to Nature Foods; Conagra Brands Inc.'s (NYSE: CAG) agreement to buy Angie's Artisan Treats; and Palladium Equity's investment in Kar Nut Products.

RXBAR
RXBAR

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Demitri Diakantonis

Demitri Diakantonis

Demitri Diakantonis joined SourceMedia in 2015 and serves as Managing Editor of Mergers & Acquisitions. He covers all aspects of middle-market deamaking, with a focus on strategic buyers and the consumer and retail sectors, and writes The Buyside column.