German meal-kit delivery company HelloFresh has agreed to acquire all of the outstanding equity interests of Factor75, a fully prepared meal delivery service provider in the US, for up to $277m.

The agreement was signed by HelloFresh’s subsidiaries in the US.

As per the agreement, HelloFresh has agreed to pay $177m upon the completion of the deal while the remaining $100m will be in the form of an earn-out and management incentives.

HelloFresh US CEO Uwe Voss said: “Direct-to-consumer ready-to-eat meals are a nascent food vertical that we believe has the potential to grow into a multi-billion dollar category over time.

“With Factor75, HelloFresh, EveryPlate and Green Chef, we have four high-growth food brands in our Group, all benefiting from our strong growth engine, technology and supply chain infrastructure.”

The deal is expected to support HelloFresh’s growth plan in the US market, as well as bolster its presence and expand its total addressable market.

Established in 2013, Factor75 offers fresh, ready-to-eat meals, and its offering portfolio includes Keto, Paleo, low-carb, vegetarian, plant-based and high protein meals.

Factor75 CEO Mike Apostal said: “Since our founding, Factor has been at the intersection of taste, health, and convenience, providing simple, clean eating that not only tastes great but fuels consumers’ active and busy lifestyles.

“By joining HelloFresh, the market leader in meal kits in the US, Factor will leverage new resources and category expertise to accelerate our growth, enhance our brand positioning and further amplify our mission.”

Completion of the deal is subject to customary conditions, including expiry of the waiting period under the US Hart-Scott-Rodino Antitrust Improvements Act, as well as approval by Factor’s shareholders and is expected to occur within the next months.

Upon completion, HelloFresh will set up its first office in the Chicago metropolitan area, as well as four production and fulfilment facilities.

HelloFresh’s new facility will have the annual capacity to deliver more than $500m worth of prepared meals.