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Hain Celestial to acquire top UK food brands

Hain Celestial to acquire top UK food brands
Hain Daniels Group has entered into an agreement to acquire Premier Foods plc's portfolio of market-leading packaged grocery brands including Hartley's, Sun-Pat, Gale's, Robertson's and Frank Cooper's.

The Hain Celestial Group, Inc. (NASDAQ: HAIN), a leading natural and organic products company providing consumers with A Healthy Way of Life™, announced that Hain Daniels Group had entered into an agreement to acquire Premier Foods plc's portfolio of market-leading packaged grocery brands including Hartley's®, Sun-Pat®, Gale's® Robertson's® and Frank Cooper's®—with peanut butter, honey, jams, fruit and jelly, marmalade and chocolate product offerings—including its Histon manufacturing base in Cambridgeshire, UK. The purchase, which is subject to approval by Premier Foods shareholders and consent from its banking syndicate, is expected to close by the end of October 2012. The acquisition is expected to be accretive to Hain Celestial's earnings upon closing.

Hain Daniels Group, wholly owned by Hain Celestial, was established in October 2011 following the acquisition of The Daniels Group. Hain Daniels makes and sells fresh food and drinks in eight chilled and frozen food categories under leading brands including the New Covent Garden Soup Co.®, Johnson's Juice Co.®, Linda McCartney®, Farmhouse Fare® and Lovetub®.

"When we acquired the Daniels Group, we planned to build upon its leadership position and use its platform for organic growth as well as future acquisition growth in the United Kingdom. The strategic initiatives launched in the United Kingdom build upon the successful long-term growth of products in the chilled category achieved by Rob Burnett and his enhanced team who we expect will continue to leverage the Hain Daniels footprint into adjacent categories to deliver superior growth and profitable returns," said Irwin D. Simon, Founder, President and Chief Executive Officer of Hain Celestial. "In order for Hain Daniels to become one of the largest healthy food companies in the United Kingdom, we needed to expand Hain Daniels base into Ambient Grocery where we can leverage Hain Celestial's track record of success in the U.S. and Canada."

Building upon the success of Hain Celestial's product offerings in ambient grocery in North America and Europe, Hain Daniels will establish an Ambient Grocery Division. The Company expects the Ambient Grocery Division to supply major food retailers, foodservice, business-to-business and export customers in the United Kingdom including Sainsbury's, Asda, Morrisons, Tesco, The Co-Operative, Waitrose and Marks & Spencer.

The business being acquired generated over $250 million in sales in its last fiscal year, 60 percent of which were sales of branded products. Consideration in the transaction will consist of 170 million Pounds Sterling in cash consideration and 30 million pounds in shares of Hain Celestial common stock.

"The acquisition of the Premier Foods brands furthers our goal to expand in the United Kingdom and positions the new expanded business in the top 40 of all food and beverage suppliers in the UK," commented Irwin Simon. "We expect to leverage the loyal customer base from Hartley's, Sun-Pat, Gale's, Robertson's, Frank Cooper's and Rose's with our existing global brands including Rice Dream®, Celestial Seasonings®, Earth's Best®, Terra® Chips and Sensible Portions® in the United Kingdom marketplace."

"Our mission at Hain Daniels is to offer our customers and the consumer relevant, convenient, inspiring and innovative branded fruit and vegetable solutions for a wide variety of consumption occasions. We believe creating the Ambient Grocery Division through the acquisition and integration of these Premier Foods brands will strengthen this proposition," added Rob Burnett, Chief Executive Officer, Hain Daniels. "Key to the success will be the experienced workforce and management at the Histon facility with whom we look forward to working."

Sale of private label chilled ready meals
The Company previously announced its intention to sell the private label chilled ready meals operations including its manufacturing site in Consett, which has been sold to Greencore Group plc. Sales attributable to this business are no longer included in the Company's reported consolidated net sales. The business unit was not a category leader for the Company and produced only private label products. Terms of the transaction, which closed Monday, were not disclosed.

Letter of intent to Sell Daily Bread™ brand
The Company had previously discussed the evaluation of its sandwich operations including the Daily Bread™ brand and has signed a letter of intent to transfer the brand to a strategic buyer. Sales attributable to the brand are no longer included in the Company's reported consolidated net sales. Daily Bread™ was no longer a core business within Hain Daniels. Terms of the transaction, which is expected to close in September 2012, were not disclosed.

Key strategic initiatives
The Company believes that the addition of the ambient grocery business to its successful fresh and frozen business in the United Kingdom provides opportunities to leverage the Hain Daniels and Hain Celestial brands including: (i) launching fruit-based kids products under the Hartley's brand; (ii) extending the Sun-Pat brand into other nut butters; (iii) expanding Gale's honey into organic product offerings and (iv) other value added products. Additionally, the Company plans to market its successful products from the United States both in their existing format and where appropriate marketing new products under the brands of the desserts and spreads being acquired and to use its distribution to expand its ambient product offerings in the United Kingdom marketplace.

With the sale of the Daily Bread brand, Hain Daniels expects to transform the Luton site into the Hain Daniels High Care, Fresh Innovation Centre specializing in healthy fruit and vegetable meal solutions. New product innovations expected from this site include the launch of Linda McCartney® vegetarian chilled ready meals, New Covent Garden Fresh Soup Bowls and Coffee Shop Food Solutions including salads and fruit.

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