The Hain Celestial Group Inc
), which distributes, markets and sells various natural and
organic foods as well as personal care products, announced that
it has completed the earlier announced acquisition of leading
packaged grocery brands - Hartley's, Gale's Robertson's, Frank
Cooper's and Sun-Pat - from Premier Foods plc.
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HAIN CELESTIAL (HAIN): Free Stock Analysis
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Acquisitions have played a vital role in Hain Celestial's
strategy of building market share. These have not only widened
the company's geographical presence, but also provided
opportunities to cross-sell products in the U.S., Canadian and
The company expects this £170 million cash (approximately $273
million) and 836,426 shares deal to be accretive to its second
quarter 2013 results. Moreover, it is expected to result in
incremental sales since it will provide the company a strong
foothold in the packaged food and grocery market, which is
swiftly strengthening its grip.
Since the buyout has been completed, Premier Foods will be the
part of the Hain Daniels Group and is expected to generate sales
of about $180 million for the 8 months period closing on June 30,
2013. Moreover, it will add up approximately 25 cents, excluding
the charges related to acquisition, to the earnings.
Going forward, the company expects to sustain strong momentum
across its business segments since it is well positioned to
capitalize on the growing global demand for organic products.
The company projects sales in the range of $1.600-$1.615 billion
in fiscal 2013 (excluding results for the discontinued operations
of private label chilled ready meals). Earnings are expected to
be in the range of $2.10-$2.20 a share.
Moreover, Hain Celestial has undertaken a number of initiatives
to improve its performance and has put itself on the growth
trajectory. The company's Stock Keeping Unit ("SKU")
rationalization program has helped eliminate SKUs, which had
lower sales volume or weak margins. Management remains focused on
improving profitability through new product introductions while
Currently, we have a long-term Neutral rating on the stock. Hain
Celestial, which competes with
General Mills Inc
), holds a Zacks #3 Rank, which translates into a short-term Hold