USA – Hain Celestial is eyeing a greater share of the US snack food market with the planned acquisition of That’s How We Roll, the producer and marketer of ParmCrisps and Thinsters.
Lake Success, New York-based Hain is expected to spend US$250 million to acquire the brans from private equity firm Clearlake Capital Group.
ParmCrisps are high-protein, low-carb cheese crisps and snack mixes, while Thinsters are crispy, thin cookies said to be made from high-quality, non-GMO ingredients.
That’s How We Roll generated approximately US$108 million in net sales for the 12 months ending Sept. 30, 2021, and is expected to have mid-teens net sales growth in calendar year 2022, according to Hain.
The purchase underscores a broader industry-wide acquisition binge by CPGs to not only expand their presence in snacking but also add products that have a better-for-you halo attached to them.
It also underscores Hain’s new growth strategy under CEO Mark Schiller who took on the president and CEO roles of Hain in November 2018.
At the time of Schiller’s appointment, the maker of Celestial teas, Terra chips, and Sensible Portions Garden Veggie Straws was a disparate group of brands in 37 different categories and had a portfolio with little coherence.
More than a third of its nearly 60 brands were losing money, and it had a presence in categories that strayed far from its center of expertise in chips, teas and baby food.
Schiller embarked on refocusing the company to its core strengths by selling off brands and has since divested 20 of them, including Tilda rice, Arrowhead Mills baking products, and poultry brand Hain Pure Protein.
The divestitures strengthened the company’s balance sheet and placed it in a stronger financial position to make deals like the purchase ParmCrisps and Thinsters.
Hain has a dominant presence in the natural and organic space, but the company said the acquisitions deepen its position in the snacking category and represent “a significant step” in further establishing it as a high-growth, global healthy food manufacturer.
The addition of cheese crisps and thin cookies moves Hain into new food categories and quickly expands a snack lineup that includes Garden of Eatin’ chips and Health Valley multigrain cereal bars.
While the products themselves may be new to its snacking portfolio, it keeps Hain in the better-for-you category where it has established a strong reputation.
Hain expects the deal, which is slated to close before the end of 2021, to be slightly accretive to its adjusted EBITDA in fiscal year 2022 and accretive in fiscal year 2023, with margins in line with the company’s existing snacks business.
Hain is the latest food and beverage maker to make an acquisition to bolster its portfolio with healthier-positioned offerings.
Coca-Cola announced in November it would spend US$5.6 billion to purchase the remaining 85% it doesn’t own in sports drink maker BodyArmor.
Hershey purchased Lily’s, a fast-growing, better-for-you confectionery brand, in May, and a few months earlier, Nestlé acquired Essentia, a premium functional brand that makes ionized alkaline water.
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