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Hain Celestial (HAIN) to Buy Snacks Brands to Boost Portfolio

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The Hain Celestial Group, Inc.’s (HAIN - Free Report) continues boosting its product portfolio to better adapt to consumers’ tastes and preferences. HAIN Celestial has been engaged in making prudent innovations and acquiring brands for sometime to cater to consumers’ needs and tap demand.

Progressing along such lines, Hain Celestial inked a deal to purchase That’s How We Roll, which is the producer and marketer of ParmCrisps and Thinsters brands. The purchase price is roughly $259 million, subjected to an adjustment for working capital. The deal, which is likely to be funded by borrowings under Hain Celestial’s revolving credit facility, is pending customary closing conditions and regulatory approvals. This transaction is expected to conclude by this year-end.

Via this acquisition, HAIN Celestial strengthens its position in the snacking category and in turn, emerges as a healthy global food company. These booming brands provide convenient products, which are consumer favorites from the Clearlake Capital Group. ParmCrisps and Thinsters are better-for-you labels made of simple ingredients. While ParmCrisps are protein, low carb cheese crisps and snack mixes, Thinsters are crispy thin cookies made from non-GMO ingredients. Products are available in several flavors.

We note that That’s How We Roll delivered net sales of nearly $108 million during the 12 months ended Sep 30, 2021. In 2022, That’s How We Roll is projected to register a mid-teens sales increase. The addition of the latest brands will support HAIN Celestial’s growing snacking platform. The buyout will be slightly accretive to Hain Celestial’s Adjusted EBITDA in fiscal 2022, following investments in its target brands. The deal will also be accretive in fiscal 2023 with margins on par with HAIN Celestial’s existing snacks business.

What’s More?

Hain Celestial is focused on strategic goals and continues making marketing investments in key brands. This presently Zacks Rank #3 (Hold) player has also been progressing well for a while with its transformation strategy to deliver sustainable profits. The strategy is aimed at simplifying its portfolio, identifying additional areas of productivity savings and enhancing margins. Management is on track to simplify its business to focus on areas with higher-growth potential.

Such well-chalked strategies including innovations and acquisitions along with marketing and assortment optimization efforts, have been aiding Hain Celestial. This natural and organic foods player’s shares have increased 18.7% in the past three months compared with its industry’s 3.6% growth.

Don’t Miss These Solid Bets

Some other top-ranked stocks are MGP Ingredients (MGPI - Free Report) , United Natural Foods (UNFI - Free Report) and J. M. Smucker (SJM - Free Report) .

MGP Ingredients, the producer and supplier of distilled spirits, and specialty wheat proteins and starch food ingredients, currently sports a Zacks Rank #1 (Strong Buy). Shares of MGPI have increased 32.1% in the past three months. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for MGP Ingredients’ current financial-year sales and EPS suggests growth of 55.5% and 61.4%, respectively, from the year-ago period’s reported figures. MGPI has a trailing four-quarter earnings surprise of 117.6%, on average.

United Natural Foods, the leading distributor of natural, organic and specialty food and non-food products in the U.S. and Canada, carries a Zacks Rank #2 (Buy) at present. Shares of UNFI have moved up 52.1% in the past three months.

The Zacks Consensus Estimate for United Natural Foods’ current financial-year EPS suggests growth of 7.8% from the year-ago period’s reported number. UNFI has a trailing four-quarter earnings surprise of 35.4%, on average.

J. M. Smucker, a renowned marketer and manufacturer of consumer food and beverage products, currently carries a Zacks Rank of 2. SJM has a trailing four-quarter earnings surprise of 10.8%, on average. Shares of SJM have gained 7.8% in the past three months.

The Zacks Consensus Estimate for J. M. Smucker’s current financial-year sales suggests growth of 0.1% from the year-ago period’s reported figure. SJM has an expected EPS growth rate of 1.2% for three-five years.