Sector News

Hain Celestial struggling to find buyers for its business

January 10, 2018
Food & Drink

Hain has long been identified as a potential takeover target, but its erratic performance and an audit of accounting discrepancies — it announced in June it would not revise any of its previous financial statements — have cast doubt on its future.

After his investment last year, Glenn Welling, founder, principal and chief investment officer of Engaged Capital, succeeded in getting himself and five other new members appointed to the 11-member board. Welling likely favors a sale of Hain, which has acquired more than 55 brands, including BluePrint juice, Celestial Seasonings teas and Garden of Eatin’ snacks, since it was founded in 1993.

In its most recent earnings report, Hain not only showed an increase in sales and profits, but its operating income margin rose from 4% in the first quarter a year ago to 5.6% — a sign it is operating its business more efficiently. The margin improvement could be particularly attractive to a buyer.

Besides Nestle, major food manufacturers mentioned as potentially interested in buying Hain, or some of its brands, include PepsiCo, Campbell Soup, Hormel Foods, General Mills, Kraft Heinz and Unilever, according to TheStreet.

If one buyer isn’t interested in the whole company, CNBC said it’s possible multiple firms could get involved. Unilever might want its personal care business — which includes Alba Botanica and Avalon Organics — while Tyson Foods or Pilgrim’s Pride might be interested in its Empire Kosher Poultry and Plainville Farms.

CPGs, which have struggled as consumers shun processed items in favor of fresher, organic and natural products, could bulk up their offerings in the space by purchasing the company. Many firms have already made moves to improve their brand lineup, and a purchase of Hain represents such an opportunity.

Still, as the New York Post noted, Hain has a hodgepodge of mostly smaller brands that would take significant time and money for a bigger player to nurture and grow — depriving the buyer of the initial bang most companies look for in a deal. It’s a far cry from four years ago when General Mills purchased the well-known Annie’s, which boasts lines of mac and cheese, cereal and yogurt, for $820 million.

Several large companies have recently acquired smaller manufacturers in the natural and organic space. Campbell Soup announced in July it would spend $700 million to purchase natural and organic brand Pacific Foods of Oregon. And Conagra Brands recently announced it would acquire Angie’s Artisan treats, the maker of Angie’s Boomchickapop popcorn.

With a market cap of $4.5 billion, Hain would be an acquisition these and other much larger food and beverage manufacturers could easy digest — if they were convinced it made sense and if experienced management could take over from Hain CEO Irwin Simon, who founded the company.

Ultimately, time may be on Hain’s side. That’s because the new law lowering corporate taxes from 35% to 21% could make a breakup much cheaper to accomplish. Simon has guided the company from the beginning, and he may not want to sell, especially for a cheap price. According to the Post, he said he didn’t build the company to sell it — but to change the way people eat. Despite that claim, in the end, it may be greenbacks and not plates of organic greens that wield the most influence over Hain’s future.

Source: Food Dive

comments closed

Related News

March 25, 2023

FrieslandCampina names Jan Derck van Karnebeek as next CEO

Food & Drink

Currently chief executive of GreenV – an international group of companies active in the horticultural sector – van Karnebeek spent a large portion of his career at Heineken, working in commercial, marketing and general management positions. He served as chief commercial officer at the Dutch brewer from 2015 until 2021.

March 25, 2023

Kerry opens innovation centre in Barcelona

Food & Drink

The facility combines the existing Kerry office in Barcelona with a new customer suite and application labs. It will enable the company to work more closely with its customers in Southern Europe to develop food and beverage solutions.

March 25, 2023

IFF expands Europe innovation hub with new flavor creation labs in Denmark

Food & Drink

The sweet and culinary flavor creation labs are the latest addition to the company’s expansive campus that has been in operation since 1964, spanning more than 312,150 square feet in Brabrand, Denmark. The innovation hub is home to more than 400 employees engaged in research, application development, ingredient and flavor creation.

How can we help you?

We're easy to reach