The Hain Celestial Group (Nasdaq: HAIN) announced it would acquire Avalon Natural Products, Inc., including its Avalon Organics and Alba Botanica natural and organic personal care brands, from North Castle Partners, a private equity firm, for $120 million in cash.
Avalon is a leader in the natural products category in the areas of skin care, hair care, bath and body and sun care with its Avalon Organic Botanicals and Alba Botanica brands with a strong sales presence in the natural food channel.
“The acquisition of the Avalon Organics and Alba Botanica brands will strengthen Hain Celestial as one of the leading natural and organic personal care products companies in a category that is experiencing double-digit growth. With this acquisition Hain Celestial will have a strong foundation in the personal care market with sales of $125 million,” said Irwin Simon, Hain President and CEO.
In its last fiscal year, sales of all Avalon and Alba brands exceeded $40 million. The acquisition, which is subject to customary government reviews, is expected to close in early 2007. The transaction is expected to be accretive to Hain Celestial’s earnings during its 2008 fiscal year.
“We entered the personal care category two and a half years ago with our acquisition of JASON, and followed on with acquisitions of Zia Natural Skincare and Queen Helene. These brands have exceeded our initial expectations and now with the addition of Avalon and Alba, we are better positioned to create a more significant platform for continued expansion in this fast-growing category. We expect that the combination of these brands will bring meaningful improvements to our business, including double-digit personal care revenue growth and overall gross margin and operating income margin enhancements. Our transformed personal care unit will be a stronger contributor to our future success as we move toward achieving our operating goals.”
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