Major US natural and organic products company Hain Celestial Inc's acquisition of British maple syrup and natural sweeteners maker Clarks UK in early December may not stop rumours that Hain Celestial is a takeover target for Swiss food and beverage giant Nestle. Hain Celestial was said to be under pressure to restructure following an agreement late September with activist investor Engaged Capital LLC, which holds a 9.9 percent stake in Hain Celestial.
Speculation increased in November after a Bloomberg report said that Nestle is considering the purchase of Hain Celestial Inc. and held preliminary talks about purchasing all or parts of Hain Celestial, according to unnamed sources.
Analysts and company followers said Hain Celestial should probably sell part or all of itself in pieces. Potential bidders could include Nestle, PepsiCo, Campbell Soup, Hormel Foods, General Mills, and Kraft Heinz among others.
The Natural Sweeteners Company, the leading maple syrup brand, and a natural sweetener brand in the UK, will be folded into the Hain Daniels spreads business. In calendar year 2016, Clarks generated approximately GBP7 million (USD9.4 million) in net sales.
"Clarks is based in Newport, South Wales, UK, and produces natural sweeteners under the Clarks brand, including maple syrup, honey and carob, date and agave syrups, which are sold in leading retailers and used by food service and industrial customers in the United Kingdom," Hain Celestial said.
"We welcome Bob Clark and his team to the Hain Celestial family and look forward to working with Clarks in expanding the brand's development in the United Kingdom and continental Europe," said Irwin D. Simon, founder, president and CEO of Hain Celestial.
"The Clarks brand and products are a strategic fit with the Hain Daniels spreads business for various natural sweeteners applications to complement our health and wellness portfolio of brands as consumers continue to seek to reduce their sugar intake and look for better-for-you alternatives to refined sugar."
Hain Celestial, the maker of Celestial Seasonings tea, Ella's Kitchen, Rudi's Organic Bakery, Avalon Organics, Earth's Best Organics, Tilda rice and BluePrint juice reported net sales of $US725 million in 2017.
Bloomberg believes that a lot of suitors could line up for Hain's popular brands that cater to the organic, gluten-free, and granola shopper segments.
Engaged Capital LLC called for sweeping changes to the food-and-beverage company’s board and its founder Glenn Welling will join the board and the company will also form a group of directors to examine strategic alternatives.
"We are focused on continuing to execute against our Four-Point Strategic Plan to: invest in top brands and capabilities to grow globally, expand project terra cost savings, enhance the leadership team to deliver our strategic plan and return capital to shareholders," said Hain Celestial CEO Irwin D. Simon.
Glenn W. Welling, founder and chief investment officer of Engaged Capital said: "We are pleased to have been able to work so constructively with Irwin Simon and members of the board on this important step toward enhancing value creation for all shareholders.
"Hain Celestial is a great business with significant opportunities for growth and margin expansion, and I look forward to working with the management team and the board to help realize the company's full potential."