Acquisition of Mona Group in fiscal 2016
Hain Celestial Group (HAIN) had anticipated that the acquisition of Mona Group would raise the scale of its plant-based operations to over $100 million in net sales in Europe in a growing category of branded and private label products. The deal was made during 1Q16 and was also expected to provide the company with additional manufacturing capacity. Management expects the Mona Group to be accretive to Hain Celestial’s earnings in fiscal 2016 though much of its effect was not seen in the first quarter. Mona Group is a leader in plant-based foods and beverages with facilities in Germany and Austria.
Acquisition of Empire Foods
In the third quarter of fiscal 2015, Hain Celestial acquired the remaining ~80% of EK Holdings and its wholly-owned subsidiary, Empire Kosher Poultry, based in Mifflintown, Pennsylvania. The purchase price for the remaining ~80% of Empire Kosher Poultry was $57.6 million, including net debt repaid at closing. Empire Kosher Poultry generated over $100 million in net sales in 2014, and Hain Celestial expects the acquisition to be accretive to its earnings in fiscal 2016. However, much of its benefits weren’t seen in this quarter. With the acquisition, Hain Celestial also plans to leverage its infrastructure to create revenue and procurement synergies.
Acquisition of Belvedere International
Hain Celestial’s management, through its acquisition of Belvedere International in 3Q15, expected to raise the scale of its Canadian operations to over $150 million in net sales. Management also intended to provide the company with opportunities for sales expansion and cost efficiencies, as this acquisition leverages existing infrastructure in Canada. Belvedere is a company that makes health and beauty care products, including the Live Clean brand. Belvedere reported ~$25 million in net sales in fiscal 2014 and could be accretive to Hain Celestial’s earnings in fiscal 2016.
The acquisitions mentioned above are expected to benefit Hain Celestial in the upcoming quarters of fiscal 2016.
Hain Celestial’s peers in the industry include Pilgrim’s Pride Corporation (PPC), McCormick & Company (MKC), and Keurig Green Mountain (GMCR). They reported net margins of 6.5%, 9.0%, and 11.7%, respectively, in their last reported quarter. The Vanguard Mid-Cap Growth ETF (VOT) invests 0.53% of its portfolio in the GMCR stock.