Cincinnati-based The Kroger Co. (NYSE:KR), the nation’s biggest pure-play grocery by sales, announced today that it will purchase all outstanding shares of Vitacost.com, Inc. (NASDAQ:VITC) for $8.00 per share in cash, or approximately $280 million.

Kroger

The definitive merger agreement unveiled today enjoyed approval from both companies’ BoDs.

Kroger’s enhanced presence in Internet retailing

The Kroger Co. (NYSE:KR), the nation’s second largest food retailer after Wal-Mart Stores, Inc. (NYSE:WMT), has been expanding its store-based products faster than most rivals. Moreover, its sales have grown strongly every quarter for over a decade.

Boca Raton, Fla-based Vitacost.com, Inc. (NASDAQ:VITC) was founded in 1994 as a catalog retailer and began shifting online five years later. It sells beauty products and natural and organic foods in addition to vitamins and supplements. Its revenue grew 16% in 2013 to $382.7 million, though it reported a net loss of $13.7 million, its fourth-straight year in the red.

Vitacost’s website currently offers over 45,000 products to about 2.3 million active customers. The Kroger Co. (NYSE:KR) anticipates to add some of its own natural and organic foods, sold under the Simple Truth brand to Vitacost.com, Inc. (NASDAQ:VITC)’s website. Kroger anticipates Simple Truth to hit $1 billion in sales this year.

Commenting on the deal, Rodney McMullen, chief executive of The Kroger Co. (NYSE:KR), said:  “This accelerates where we are by a few years, much faster than if we went and tried to build it on our own”.

Last year, The Kroger Co. (NYSE:KR) announced its agreement to acquire Harris Teeter Supermarkets Inc (NYSE:HTSI) for $2.5 billion in cash, which was touted as the second largest transaction in the grocery industry in the United States last year.

The Harris Teeter deal gave The Kroger Co. (NYSE:KR) access to what’s called click-and-collect technology, where people order online and pick up at the store.

Major shareholder sought strategic alternatives

The Kroger Co. (NYSE:KR)’s $8 per share deal to acquire Vitacost represents a 27% premium to Vitacost’s closing price on Tuesday and 51% above the level the company traded at before a major shareholder in February publicly asked the company to mull strategic alternatives.

Responding to the shareholder’s proposal, Vitacost.com, Inc. (NASDAQ:VITC) hired Jefferies LLC in December to help explore strategic alternatives.

The Kroger Co. (NYSE:KR) said Wednesday that it intends to finance the deal with debt, and also plans to commit to maintaining its investment-grade credit rating.