Milk Specialties Global buys gluten-free specialist Kay's Processing of Clara City

Eden Prairie-based Milk Specialties Global has bought Kay's Processing, expanding its reach within the health foods industry.

Kay's Processing, based in Clara City, Minn., makes gluten-free cereals and snacks. Its products, sold under the Kay's Naturals brand, are sold at co-ops and natural foods stores nationwide.

Milk Specialties Global (MSG) is known for its whey protein-based sports and wellness products.

This acquisition, which includes Kay's certified gluten-free production plant in Clara City, broadens MSG's offerings and capabilities.

It positions the company to capitalize on the the burgeoning market for extruded protein — a process that takes plant-based proteins, found in peas, rice and soy, and turns them into snack bars, faux meat or other foods.

"We try to keep pace with our customers and what's happening in the consumer world," said Ben Kroeplin, a spokesman for MSG. "Kay's gives us a whole new dynamic. We've historically been very focused on high protein so it's just a natural fit with where we see ourselves going."

Kroeplin declined to share the deal's sale price. He said Milk Specialities will invest millions into the 96,000-square-foot Clara City facility and double the workforce, which currently hovers just below 30 employees.

MSG makes nutritional products for both humans and animals. This marks its 11^th facility and its second in Minnesota.