Hain Acquires Spectrum Organic, Closes Record FY05

Hain Acquires Spectrum Organic, Closes Record FY05

MELVILLE, N.Y.Hain CelestialGroup Inc. (NASDAQ:HAIN) entered into an agreement to purchase Spectrum OrganicProducts (OTCBB:SPOP) for a total of approximately $34.5 million. SPOPshareholders will receive an estimated $0.705 per share in a combination of cashand HAIN stock. The actual exchange ratio will be based on the average closingprice of HAIN stock for a 10-day period ending shortly before the acquisitionclosing date, which is expected to be in the fourth quarter of 2005. Thetransaction is subject to approval by SPOP shareholders.

Jethren Phillips, founder and chairman of Spectrum(www.spectrumorganics.com), said the acquisition with Hain(www.hain-celestial.com), which maintains a strong presence in natural foods andother key channels, will enable Spectrum to more rapidly and efficiently expandits product lines, which include natural and organic culinary oils, vinegars,condiments and butter substitutes.

Spectrum has been a well-respected marketer and producer ofnatural and organic oils in natural food channels for many years, said IrwinSimon, president and chief executive officer (CEO) of Hain. Adding theirrange of offerings in this category to Hain Celestials existing portfoliogives us another opportunity to offer our customers additional category-leadingproducts.

In addition to Spectrum Natural and Essentials, theacquisition also includes Spectrum Ingredients, which is outside of Hainstraditional business focus. As the transaction is still pending, Hain managementwould not comment on its future plans for the ingredients component, except tosay it was interested in the entire Spectrum business, a sentiment echoed in itspress release. We look forward to expanding Spectrum Naturals, Essentials andIngredients businesses, Simon said.

In other Hain news, the company closed fiscal 2005 with recordrevenues of $620 million, up 14 percent from last year, crediting sales andmarketing programs, as well as its overall business strategy. However, part of Hains restructuring included SKU removals,which cut millions per year from sales but are expected to save the companysignificant money each year, in addition to improving margins. Excluding the SKUcuts, earnings rose 23 percent to $33.1 million.