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Hain Celestial (HAIN) Concludes Sale of Tilda to Ebro Foods

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The Hain Celestial Group, Inc. (HAIN - Free Report) has recently concluded the sale of Tilda to Ebro Foods in a deal worth $342 million in cash. Part of the net proceeds from this sale will be utilized to reduce the debt level. The company is evaluating options to use the remaining amount in a way to maximize shareholder’s value.

Tilda, a premium basmati and specialty rice brand, is projected to contribute nearly $200 million to sales and $25 million of adjusted EBITDA for the fiscal year.

With this divestiture, the company hopes to lower “exposure to marketplace disruption related to the uncertainty of Brexit and any potential currency headwinds.” This move is in sync with its transformational plan that aims at simplifying portfolio, strengthening core brands, and expanding margins and cash flow. It is also eliminating low-margin or underperforming businesses to enhance the portfolio.

Keeping in these lines, Hain Celestial concluded the sale of a significant chunk of assets related to the Plainville Farms business and also 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 has helped eliminate SKUs based on lower sales volume or soft margins. It is focused on global strategic goals and continues to make marketing investments in key brands.

All said, we believe these initiatives to drive the company's performance. Notably, this Zacks Rank #3 (Hold) stock has declined 11.5% in the past three months against the industry’s growth of 6.5%.

 


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