Hain Celestial,a US-based natural and organic products company,has entered into an agreement to acquire leading packaged grocery brands from UK-based Premier Foods in a£200m cash and stock deal.
Under the agreement,Hain will pay£170m in cash and£30m in shares of its common stock.
The acquisition includes brands such as Hartley's,Sun-Pat,Gale's Robertson's,and Frank Cooper's,which offer products such as peanut butter,honey,jams,fruit and jelly,marmalade,and chocolate.The sale also includes Premier Foods'manufacturing base in Cambridgeshire,UK.
Hain Celestial founder,president and CEO Irwin D Simon said the acquisition furthers the company's goal to expand in the UK.
The company plans to leverage the customer base from the acquired brands with its existing global brands including Rice Dream,Celestial Seasonings,Earth's Best,Terra Chips and Sensible Portions in the UK marketplace,Simon added.
Hain Celestial noted that the business being acquired generated over$250m in sales in the fiscal year 2011.
The acquisition,which is subject to approval by Premier Foods'shareholders and consent from the banking syndicate,will add about$0.25 a share to Hain's earnings in fiscal 2013.
The acquisition is likely to be completed by the end of October 2012,following which,Hain Celestial will combine these grocery brands to form a new Ambient Grocery Division.
Premier Foods is struggling with a debt of£1.3bn,which was built up through acquisitions of a number of brands including Homepride and Fray Bentos.In March 2012,the company renegotiated its bank debt,and received an extension for its repayment deadline from 2013 to 2016.
