USA – The organic and natural products company, Hain Celestial has closed the sale of its Arrowhead Mills and SunSpire brands to Hometown Food Company in a US$15 million deal.
The transaction includes the Arrowhead Mills manufacturing facility in Hereford, Texas and its employees. Arrowhead Mills makes a range of baking mixes, breakfast cereals and flours.
Mark Schiller, Hain Celestial CEO said, “We are pleased to complete the strategic divestitures of the Arrowhead Mills and SunSpire brands, demonstrating the consistent execution of our stated transformational plan to reduce complexity and simplify the brand portfolio.”
“We believe the Arrowhead Mills and SunSpire brands will thrive under new ownership as we focus our future initiatives and investments on areas of our business that better leverage our core competencies to improve our margins, profitability and cash flow generation.”
SunSpire offers a variety of baking chocolate, baking chips and chocolate candy.
While the value of the transaction is subject to customary post-closing adjustments, Hain Celestial said the deal will have a negligible impact on its ongoing EBITDA.
Hometown Food Company is a wholly-owned portfolio company of Greewich private equity fund Brynwood Partners.
Hometown Food Company, based in Chicago, Illinois, was formed by Brynwood Partners in June 2018 to acquire a portfolio of brands from The J.M. Smucker Company for for US$375 million.
Henk Hartong, CEO of Brynwood Partners said that the acquisition of the two brands will bring focus and energy to the business and enable the company to execute its growth strategy.
“We are delighted to announce the acquisition of the Arrowhead Mills and SunSpire brands into Hometown Foods,”.
“Arrowhead Mills and SunSpire were pioneers in the organic, non-GMO ingredients space and we are excited to add these tremendous brands to our portfolio. This acquisition strengthens our industry position by adding improved capabilities in the better-for-you space that we plan to extend into our other categories.”
Hain Celestial Group management has been focusing on improving the profitability of the company’s business through divest low-margin and low-growth units.
In August this year, the company offloaded its Tidla Rice brand for US$342 million. Hain has also sold the WestSoytofu, seitan and tempeh unit as well as Hain Pure Protein Business.