Hain Celestial Weighs Sale of Organic Baby Food Brand
(Bloomberg) -- Hain Celestial Group Inc. is considering a sale of its “Earth’s Best” organic baby food brand in a deal that could fetch at least $200 million, people with knowledge of the matter said.
The U.S. food company is working with an adviser to seek a buyer for the brand, said the people, who asked not to be identified as the information is private. It will soon reach out to prospective bidders to gauge their interest, the people said.
A potential disposal comes as the manufacturer of Health Valley cereal bars and Terra vegetable chips revamps its brand portfolio. The company announced this month that it has completed the divestiture of its U.K. fruit business, including the Orchard House Foods Ltd. business and associated brands, to a private equity firm for an undisclosed amount.
Earth’s Best, founded in 1985, sells products ranging from infant and toddler formula, organic cereal, pureed foods to diapers and wipes, according to its website. Hain Celestial acquired the firm in 2000. The Earth’s Best brand was once extended into more than 40 different categories including chicken nuggets. The company later streamlined the brand’s products and improved its EBITDA margin to about 10% over a couple of years, its President Mark Schiller said in a conference call with investors this month.
Shares in Hain Celestial rose 2.9% and closed at their highest level since Jan. 2018, giving the company a market value of about $4.1 billion.
Deliberations on a potential sale of the Earth’s Best brand are at an early stage, and Hain Celestial could decide to keep the business, the people said. A representative for Hain Celestial declined to comment.
A divestment would see Hain Celestial join companies including Royal FrieslandCampina NV that are streamlining their operations. The Dutch food group is considering options for its Friso infant nutrition brand, Bloomberg News reported last week. FrieslandCampina is also seeking a buyer for its 50% stake in Thai yogurt venture Betagen, people familiar with the matter have said.
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