The transaction is valued at $40 million. HPP will be a separate operating segment of the Hain Celestial.
HPP is a leading producer of antibiotic-free and organic poultry. The company manufactures a full range of fresh and frozen private-label products along with chicken and turkey products sold under the FreeBird and Plainville Farms brands, respectively. HPP is expected to generate more than $230 million in net sales in FY2014, a double digit increase over the prior year. The transaction is expected to be accretive to Hain Celestial's earnings in FY2015 by $0.03 to $0.05 per diluted share.
"We are very excited about the strategic acquisition of HPP. Our joint venture has successfully grown from incubation to over $200 million in net sales by focusing on antibiotic-free and organic poultry," said Irwin Simon, founder, president and CEO of Hain Celestial. "While we have enjoyed partnering with Pegasus for many years, having FreeBird chicken and Plainville Farms turkey as part of Hain Celestial's branded product portfolio provides us with a wide array of Farm to Table product offerings from fresh to deli and food service in a growing category that appeals to those seeking "the pure foods trend", including our core natural and organic consumers."
Jay Lieberman, COO of HPP, will continue to be responsible for day-to-day operations at HPP. Ted Maguire, senior vice president of sales for HPP will assume responsibility for expanding Hain Celestial's products into the foodservice channel currently served by HPP.
Hain Celestial said the company plans to continue to improve HPP's results by leveraging its sales network, marketing and administrative functions and improving productivity.
"We expect to deliver synergies through increased sales growth and cost efficiencies by effectively leveraging Hain Celestial's broader scale, as we have successfully demonstrated with our previous acquisitions," Simon added. "This is a great category for us. We view HPP's product offerings as a complement to our existing product portfolio and a platform from which we can expand our snacks and other Hain Celestial's product offerings into foodservice, and we will continue to pursue other accretive strategic acquisitions for Hain Celestial in growing categories in the natural and organic sector."