- Hain Celestial plans to acquire That's How We Roll, the producer and marketer of ParmCrisps and Thinsters, for about $259 million from private equity firm Clearlake Capital Group, the company said in a statement.
- ParmCrisps are high-protein, low-carb cheese crisps and snack mixes, while Thinsters are crispy, thin cookies said to be made from high-quality, non-GMO ingredients. That’s How We Roll generated approximately $108 million in net sales for the 12 months ending Sept. 30, 2021, and is expected to have mid-teens net sales growth in calendar year 2022, according to Hain.
- The purchase underscores a broader industry-wide acquisition binge by CPGs to not only expand their presence in snacking but also add products that have a better-for-you halo attached to them.
When Mark Schiller took on the president and CEO roles of Hain in November 2018, the maker of Celestial teas, Terra chips and Sensible Portions Garden Veggie Straws was a disparate group of brands in 37 different categories and had a portfolio with little coherence. More than a third of its nearly 60 brands were losing money, and it had a presence in categories that strayed far from its center of expertise in chips, teas and baby food.
Schiller started selling off brands, and has since divested 20 of them, including Tilda rice, Arrowhead Mills baking products and poultry brand Hain Pure Protein.
The divestitures strengthened the company's balance sheet and placed it in a stronger financial position to make deals like Monday's announcement to purchase ParmCrisps and Thinsters.
Hain has a dominant presence in the natural and organic space, but the company said the acquisitions deepen its position in the snacking category and represent "a significant step" in further establishing it as a high-growth, global healthy food manufacturer.
The addition of cheese crisps and thin cookies moves Hain into new food categories and quickly expands a snack lineup that includes Garden of Eatin’ chips and Health Valley multigrain cereal bars. While the products themselves may be new to its snacking portfolio, it keeps Hain in the better-for-you category where it has established a strong reputation.
“ParmCrisps and Thinsters are optimally positioned to benefit from consumer preferences for clean-label and high-protein snacks,” Schiller said in a statement. “Both brands have created loyal followings by being true to their unique value propositions."
Hain expects the deal, which is slated to close before the end of 2021, to be slightly accretive to its adjusted EBITDA in fiscal year 2022 and accretive in fiscal year 2023, with margins in line with the company's existing snacks business.
It's likely that more deals are on the horizon for Hain. Schiller said in June that Hain was looking for purchases to support its existing lineup. Those could be a potato chip brand to complement its puffed and popped snacks, or a salsa to go with its tortilla chips, he said. It also could buy green and black teas to complement its deep presence in herbal.
Hain is the latest food and beverage maker to make an acquisition to bolster its portfolio with healthier-positioned offerings.
Coca-Cola announced in November it would spend $5.6 billion to purchase the remaining 85% it doesn't own in BodyArmor, a sports drink maker that touts its use of coconut water, low sodium and high potassium levels, absence of artificial colors and use of sugar in place of high fructose corn syrup. Hershey purchased Lily's, a fast-growing, better-for-you confectionery brand, in May. And a few months earlier, Nestlé acquired Essentia, a premium functional brand that makes ionized alkaline water.