Hain Celestial Buys Imagine Foods
December 3, 2002
UNIONDALE, N.Y.--The Hain Celestial Group Inc. (NASDAQ:HAIN) acquired Imagine Foods Inc., a privately held, non-dairy beverage company with brands that include Rice Dream and Soy Dream. Terms of the transaction were not disclosed, but Hain Celestial reported the acquisition would boost the company's earnings by $.02 to $.03 per share during the 2003 fiscal year and by $.08 to $.11 by fiscal 2004. The Dec. 3 edition of The New York Times (www.nytimes.com) reported that Hain Celestial would also be assuming Imagine Foods' $1.5 million debt.
Irwin D. Simon, Hain Celestial's chairman and chief executive officer (CEO), reported the acquisition would enhance the company's current product offerings. "In non-dairy beverages, Imagine will strengthen our offering to our natural and retail customers," he said. "With Westsoy, Rice Dream and Soy Dream, we will bring increased scale to both the aseptic aisle and the refrigerated, non-dairy beverages section." The addition of Imagine Organic aseptic soups and broths should further boost Hain's double-digit growth in that area. "Additionally, Imagine Natural Organic soups give us a much stronger foothold in ready-to-eat soups," Simon said.
According to Imagine Foods' CEO and founder, Robert Nissenbaum, the timing was right to join forces with Hain Celestial. "We can look forward to developing even more new products and creating growth for all of the expanded Hain Celestial Group's brands," he said.
Nissenbaum will be joining Hain Celestial, but at press time, it was unknown in what capacity. It was also not known how the acquisition would affect Imagine Foods' current operations.
According to The Times, the companies first met to discuss selling Imagine Foods in 2001, but it was put on hold after the companies failed to agree on a sale price. Reportedly, Imagine Foods posted revenues of $70 million in its most current fiscal year; Hain Celestial had net sales of $396 million for its fiscal year, ended June 30.
"I think it was definitely a good deal for Hain Celestial, given the accretion to earnings, and it was a good time for Imagine to look to a sale, given the changes going on in the aseptic non-dairy beverage business," said Scott Van Winkle, CFA, principal at Boston-based Adams, Harkness & Hill, an investment bank. "With the growth of non-dairy beverages moving to refrigerated, it appears to be a strategically sound move for the two leaders in aseptic non-dairy to combine."
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