As Brexit looms, Hain Celestial Group is making a big exit with a brand that’s big in the United Kingdom and the United States.
The Hain Celestial Group today said it completed the sale of Tilda, a basmati and specialty rice brand, to Madrid-based Ebro Foods for $342 million in cash.
The Lake Success-based company said it “expects to use a portion of the proceeds to pay down debt” and is evaluating what to do with the “remainder to maximize value to shareholders.”
CEO Mark Schiller called this “strategic sale” part of a push to “simplify our portfolio, strengthen our core capabilities and expand margins and cash flow.” Credit Suisse acted as financial advisor on the sale.
Still, Schiller spoke highly of Tilda, which he said had “been a strong business for us, primarily in the United Kingdom.”
He doesn’t anticipate that the brand will contract, but said under new ownership, he expects Tilda “to continue to thrive.”
But the CEO said he believes Hain Celestial got the right price at the right time, citing uncertainty in Great Britain around Brexit.
“We believe this transaction represents a significant premium to a majority of other European food and global rice and pasta industry transactions over the last several years,” Schiller said. “In addition, this divestiture will enable us to reduce our exposure to marketplace disruption associated with the uncertainty of Brexit and additional future potential foreign currency fluctuations.”
Ebro in a written statement issued in Spanish referred to Tilda as a premium rice brand with international prestige that would fit in well with its broad range of rice and pasta brands.
“Today we are the first company in the world in rice and the second globally in the sectors of fresh and dried pasta,” according to Ebro, which has been expanding organically and through mergers and acquisitions.
Tilda was founded in London in the early 1970s with a name that is a combination of the founder’s daughters Tila and Daksha.
The company began selling basmati rice in large bags around the world, gradually growing to offer a wide range of rice and grain products.
Hain Celestial is a global food giant with a total of a little bit under $3 billion in annual sales in more than 70 nations, 7,800 employees and 38 manufacturing facilities, according to the company’s website.
About $1.9 billion of Hain Celestial’s sales are in the United States, according to the site, followed by $768.3 million in the United Kingdom.
Tilda is expected to contribute approximately $200 million in net sales and $25 million of adjusted earnings before interest, tax, depreciation and amortization or EBITDA to Hain Celestial for the fiscal year ending June 30, 2019.
