The Melville, New York-based company has agreed to pay Spectrum shareholders about $0.705 per share, in a 50-50 combination of cash and Hain celestial common stock. The price - equivalent to about $33 million - is subject to adjustment depending on Spectrum's expenses and other provisions in the agreement.
Hain's consumer portfolio consists of natural and organic consumer grocery, beverage, snack and personal care brands, such as Arrowhead Mills, Casbah and celestial Seasonings.
Through the deal announced today, it will add the Spectrum Naturals brand of natural and organic culinary oils, vinegars, condiments and butter substitutes, as well as the Spectrum Essentials line of essential fatty acid nutritional supplements.
The third part of Spectrum's business, also included in the deal, is the Spectrum Ingredients Division, which supplied ingredients to other manufacturers on an industrial scale.
Given the current emphasis on including the right kinds of fats in the diet, namely unsaturated fats in place of saturated and trans fats, and the ever increasing store of evidence for the health benefits of omega-3, the time is ripe to expand Spectrum's presence in the marketplace.
And both parties agree that working within the framework of the larger company will enable that to happen more quickly.
Last fiscal year Spectrum reported sales of $49.9 million. Hain Celestial, which is 17 percent owned by Heinz, had sales of $544.1 million.
"Hain Celestial provides Spectrum with a platform for accelerated expansion of our product lines. We look forward to benefiting from being part of the Hain Celestial family, as their presence in natural and other channels will enable us to provide health sustaining natural products that are the highest in consumer value," said Spectrum's chairman of the board Jethren Phillips, who founded the company almost 20 years ago.
Irwin Simon, president and CEO of Hain Celestial, said: "We look forward to expanding Spectrum Naturals, Essentials and Ingredients businesses as consumers increasingly seek healthy oils as part of a balanced diet and as recently recommended by the USDA Dietary Guidelines."
In 2002 Spectrum sold its organic ingredients division to a company called Acirca for an undisclosed sum. The division included Spectrum's industrial sales of organic fruits, vegetables, concentrates, purees and certain private label products, but oils were excluded from the deal.