Hain Celestial Group divests its non-core supplier of prepared fruit, fresh fruit drinks and desserts

UK private equity fund Elaghmore has acquired Orchard House Foods, a UK supplier of prepared fruit, fresh fruit drinks and desserts, from Hain Celestial Group.

Orchard House sources and prepares a range of fresh fruits from across the world and supplies retailers, on-the-go food outlets, food service providers and manufacturers throughout the UK, with clients including Marks & Spencer, Morrisons, Pret A Manger, Sainsbury’s and Tesco.

The company is based in Corby, Northamptonshire with additional facilities in Gateshead, Tyne and Wear, and employs around 1,000 people.

The Hain Celestial Group is an organic and natural products company based in Lake Success, New York, with operations in North America, Europe, Asia and the Middle East.

Michael Rice, investment director at Elaghmore, said: “Orchard House is a market-leading business which supplies products that many UK customers buy daily. We are very proud that we will be part of Orchard House’s growth and development as we look beyond Covid-19. Orchard House is a flagship investment for Elaghmore, and our financial strength and operational expertise means we can help Orchard House prosper. Elaghmore’s deal pipeline is full of interesting opportunities. The pandemic has seen the need for many successful companies to seek new investment, especially as government support schemes end, and bank support is limited. Elaghmore is well placed to help these companies, and we look forward to continuing to create significant value for our investors.”

Elaghmore founders Andy Ducker and David Manning have experience working with a global fruit business as investors and executives at Chaucer Foods, which they developed and subsequently sold to Nagatanien Holdings Co in December 2016 in a deal worth $130 million.

Mark L Schiller, Hain Celestial’s president and chief executive, said: “We are pleased to complete the strategic sale of our fruit business to Elaghmore, a private equity firm focused on buying and growing UK businesses. The divestment of this complex, non-core asset fully aligns with our brand simplification and strategic transformation processes. By divesting this business, which was negatively impacted by the Covid-19 pandemic, the remaining Hain Celestial business will show immediate improvement in its growth rate and margins, allowing us to reinvest capital behind the strength of the remaining international platform. We remain confident in our ability to continue to improve our overall margin and cash flow profiles to fuel sustainable long-term growth and profitability.”

Elaghmore was advised on the deal by global investment bank Houlihan Lokey, financial and tax advisers EY, and law firm Squire Patton Boggs. Spayne Lindsay & Co was financial advisor and DLA Piper UK was legal counsel to Hain Celestial.

Date published: 18 January 2021

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