The Hain Celestial Group Inc. (HAIN) constantly seeks strategic opportunities to expand its footprint in organic and natural products and in turn, "Change the Way the World Eats." Its latest attempt is the acquisition of Rudi's Organic Bakery, one of the leading organic and gluten-free companies, for $61.3 million.
Rudi's provides a wide range of about 60 products comprising USDA certified organic breads, buns, bagels, tortillas, wraps and soft pretzels and GFCO certified natural breads, buns, pizza crusts, tortillas, snack bars and stuffing in the United States and Canada.
Management believes that Rudi's buyout will augment Hain Celestial's earnings in fiscal year 2015. In the last calendar year, Rudi's generated net sales of approximately $60 million.
Acquisitions have played a vital part in Hain Celestial’s strategy of building market share. These acquisitions have not only widened the company’s geographical presence, but have also provided opportunities to cross-sell products in the U.S., Canadian and European markets. Moreover, it is expected to result in incremental sales since it provides the company a strong foothold in the packaged food and grocery market, which is swiftly strengthening its grip.
Earlier, the company acquired Tilda Limited, a renowned name in Basmati rice. The company also purchased leading packaged grocery brands Hartley's, Gale's Robertson's, Frank Cooper's and Sun-Pat from Premier Foods plc. The company also acquired Ella's Kitchen Group Limited that offers organic baby food products under approximately 80 brands and provides them in easy to carry pouches.
Hain Celestial’s strategic investments coupled with continued efforts to contain costs, increase productivity, and enhance cash flows and margins enabled it to deliver healthy results. The company, which competes with General Mills Inc. (GIS), expects to sustain strong momentum as it remains well positioned to capitalize on the growing global demand for organic products through acquisitions.
Hain Celestial, which is slated to release its third-quarter fiscal year 2014 results on May 8, 2014, currently carries a Zacks Rank #3 (Hold). Other better ranked stocks worth considering include, Treehouse Foods, Inc. (THS) and J&J Snack Foods Corp. (JJSF) both sporting a Zacks Rank #2 (Buy).
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