The Hain Celestial Group Inc has reached agreement with Pegasus Capital Advisors LP under which Pegasus acquired a controlling interest in the Hain Pure Protein joint venture with the issuance of new shares of Hain Pure Protein. As a result, Pegasus will own approximately 51% of the Hain Pure Protein equity, while Hain Celestial will own 49%. In addition, Hain Pure Protein entered into a $30 million credit facility with Wachovia Bank NA.
With the firm’s increased equity ownership in Hain Pure Protein, Rodney Cohen, co-managing partner of Pegasus, has been appointed chairman of the board of directors of the joint venture.
Hain Pure Protein Corporation was formed in July 2005 to establish FreeBird Chicken, which specializes in natural, organic, and antibiotic-free chicken. In August 2007, Hain Pure Protein acquired the assets of Plainville Turkey Farm Inc, a supplier of natural and antibiotic-free whole turkeys and deli turkey products in the Northeast and Mid-Atlantic, and in March 2008, the company expanded its turkey operations with the acquisition of a facility in New Oxford PA. Earlier this year, Hain Pure Protein commenced operations of the Kosher Valley brand, a new certified kosher brand of all-natural, antibiotic-free, vegetarian-fed, and humanely raised chicken and turkey products.
The impact of this transaction will not be material to Hain Celestial’s net income; however, Hain Celestial anticipates that Hain Pure Protein will no longer be consolidated into Hain Celestial’s financial statements but rather will be accounted for on the equity method. Sales of Hain Pure Protein were $130.2 million for the nine months ended March 31, 2009, and $90.6 million and $34.7 million for the years ended June 30, 2008 and 2007, respectively.