Hain Celestial Divests Arrowhead Mills, SunSpire To Hometown
Zacks Investment Research | Oct 08, 2019 10:09PM ET
The Hain Celestial Group, Inc. (NASDAQ:HAIN) is on a divestiture spree as it recently concluded the sale of Arrowhead Mills and SunSpire brands to Hometown Food Company. Hometown is a wholly-owned portfolio company of private equity investment firm Brynwood Partners.
Following the completion of the deal, Hometown will now possess the manufacturing facility of Arrowhead Mills, located in Hereford, TX, along with its employees. Hain Celestial pointed out that the transaction will have a minimal impact on its ongoing Earnings before interest, tax, depreciation and amortization (EBITDA).
The deal worth $15 million is in sync with the company’s transformational plans that aim to optimize its product portfolio. In this regard, Hain Celestial has been offloading businesses with low margin and low growth potential to boost the top line and improve profitability.
The company concluded the sale of Tilda to EBRO FOODS in August. Additionally, Hain Celestial completed the sale of a significant chunk of assets related to the Plainville Farms business, and divested WestSoy tofu, seitan and tempeh businesses. Moreover, the company concluded the sale of its entire equity stake in Hain Pure Protein Corporation, which incorporates the FreeBird and Empire Kosher businesses.
These apart, Hain Celestial is well on track with Project Terra, which aims at cutting costs and complexity, and aiding sales growth. The company’s Stock Keeping Unit (“SKU”) rationalization program helped eliminate SKUs based on lower sales volume or soft margins. It is focused on global goals and continues to make marketing investments in key brands.
All said, we believe that these initiatives will drive Hain Celestial's performance in the near future. Meanwhile, the Zacks Rank #4 (Sell) stock has declined 8.1% in the past three months against the Original post
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