Filed by Celestial Seasonings, Inc.
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
of the Securities and Exchange Act of 1934
Subject Company: Celestial Seasonings, Inc.
Commission File No. 0-22018
The Hain Food Group, Inc., a Delaware corporation ("Hain")
and Celestial Seasonings, Inc., a Delaware corporation
("Celestial"), jointly prepared the following speaking points in connection
with a conference call with financial analysts held on March 6, 2000:
Irwin's Speaking Points
o Welcome
o Introductions of individuals - I am, Mo is, Steve is . . .
o Express excitement for the merger as Hain, the leading natural and
organic food company, and Celestial Seasonings, the preeminent US
specialty tea company combine to create a true powerhouse
o Outline the great opportunities that the merger will provide
including:
o Strong Brands
o Distribution Synergies
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o Expanding market for natural foods
o All of which we'll talk about in more detail in a minute
o Together, we see
o Long term growth opportunities
o The merger establishes Hain's leading position in the major natural
foods categories, giving Hain Celestial leadership in the top 3
categories, and propelling Hain into major shares in 13 of the top 15
categories
o Terms of the agreement:
o 1.265 shares of Hain common stock will be exchanged for each share of
Celestial Seasonings stock
o Transaction is valued at approximately $390 million, including the
assumption of net debt
o Accretive to EPS in the first year of combined operations, excluding
non-recurring merger-related costs -- and accounted for as a pooling
of interest
o Total combined pro-forma sales expected to be $430 million
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o Anticipate revenue synergies
o In addition, pre-tax cost savings that are expected to total $5-$10
million over the next two years
o The combined companies will benefit from increased market
capitalization, enhanced credit and greater share float
o Three main compelling reasons for the deal:
(1) Bringing together great brands. Hain already has a major share in 12
of the top 15 categories, now moving into 13, and more importantly,
leadership of top 3 categories
o A combination of top brands such as Earth's Best Baby Food, Terra
Chips, Health Valley products, West Soy, and Celestial Seasonings
teas such as Sleepytime, Red Zinger and Tension Tamer teas
(2) Distribution Channels
o Hain brings its experience in selling these brands to specialty
natural food markets while Celestial brings great expertise in
selling into the retail mass market. Combination is perfect for
the future
o Take advantage of Heinz's strength in foodservice and
international to further leverage opportunities
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(3) Expanding Markets
o This merger brings the two companies together, and positions the
companies to take advantage of rapidly expanding markets such as:
o Health Foods
o Tea - especially Green and Wellness
o GMO-free
o Baby boomer desires
o Recently got back from CAGNY - great reception
o Given these factors, we will be a force in the industry
o Future of Celestial
o Celestial will remain a wholly owned subsidiary
o Operating independently but under Hain ownership
o Part of The Hain Celestial Group, of which I will be chairman,
president, and CEO
o Mo Siegel to become vice-chairman; to join Hain Board, as will 2 other
Celestial directors
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o Now, going to turn it over to Mo . . .
Mo Siegel's Remarks
o Thanks Irwin
o Delighted with today's announcement, and with potential here
o We are bringing together 2 recognized leaders at a very exciting time for
the entire natural and organic industry:
o Explosive growth of sector - US natural and organic as a whole a $20
billion market, growing at 15-18% annually
o especially in teas, with green and wellness, in which we are the
share leader
o This combination absolutely unlocks the potential for tea, especially
with international and foodservice
o On a wider level, our company will increase distribution of products
into a wider variety of stores, at a time when cross-over of mass
markets to natural foods is growing
o In addition, we will have the largest R&D department in the natural
food business. Gives us steady stream of new products in the future
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o Extremely enthusiastic about the merger as Hain, the leading natural
and organic food company, and Celestial Seasonings, the preeminent US
specialty tea company combine to create a true powerhouse
o Also believe that this is a great cultural fit -- we were not for sale as
such, but Hain has such a terrific group of natural foods products, and
such a good track-record of promoting growth for its brands, that The Hain
Celestial Group was the best way to create value for our shareholders
o Very excited about working together to grow our business, using our great
brands in an expanding market
o A key way to do this will be by taking advantage of
cross-fertilization opportunities in our distribution
o Steve will speak more about that, Steve . . .
Steve Hughes' Remarks
o Thanks Mo.
o Irwin and Mo have told you about the transaction itself, and why it is a
great deal
o It positions the Hain Celestial Group, with its great brands, at the
forefront of a rapidly expanding market
o I want to outline how we intend to take advantage of the distribution
synergies that we have
o The merger will take advantage of the cross-fertilization of each
company's distribution channels to expand the reach of both companies'
brands
o It combines Hain's strong natural foods brands with Celestial's
leading market presence in the grocery, drug and mass market channel
o Our combined distribution infrastructure includes
o Celestial Seasonings' 80% of sales through retail mass market channels
o Hain's 60% through natural food channels
o Hain does 20% of business in grocery. There is tremendous opportunity
for the Celestial marketing and sales team to drive the grocery
distribution on brands like West brae, Earth's Best, Terra, and Health
Valley
o Celestial's success over the last 3 years crossing over green and
wellness teas from the natural foods to the
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grocery channel reflects the opportunity for the potential of the
Hain's portfolio of brands in the grocery channel. The market is ready
and the combination of Hain's brands and Celestial infrastructure is
the ideal combination to insure Hain Celestial Group becomes the
natural and organic food leader in the grocery channel
o As Irwin mentioned, Hain's alliance with Heinz will provide valuable
benefits to The Hain Celestial Group
o For us, it expands distribution of Celestial Seasonings' specialty
teas through Heinz's international and foodservice channels
o Together, we will create the undisputed leader in natural and organic
foods, with a market cap that exceeds $1 billion.
Irwin Simon's Closing Remarks
o Summation
o Re-stress excitement for the terrific transaction and the growth
opportunities that it will bring for:
o The new company
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o Shareholders
o Employees
o Ultimately, Hain is the fastest-growing publicly held food company;
Celestial is the fastest-growing publicly held beverage company -
combined we believe we will be the number one natural and organic food
and beverage company in the world
Questions . . .
Statements made in this Document that state the intentions, beliefs,
expectations or predictions of The Hain Food Group, Celestial Seasonings, Inc.
or their respective managements for the future are forward-looking statements.
It is important to note that actual results could differ materially from those
projected in such forward-looking statements. Information concerning factors
that could cause actual results to differ materially from those in
forward-looking statements is contained from time to time in filings of each of
The Hain Food Group and Celestial Seasonings, Inc. with the U.S. Securities and
Exchange Commission. Copies of these filings may be obtained by contacting The
Hain Food Group or Celestial Seasonings, Inc. as applicable, or the SEC.
INVESTORS ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS INCLUDING ANY
AMENDMENTS OR SUPPLEMENTS THERETO (THE "JOINT PROXY STATEMENT/PROSPECTUS") WHICH
WILL BE PREPARED BY THE HAIN FOOD GROUP AND CELESTIAL SEASONINGS, INC. INVESTORS
ARE URGED TO READ THE JOINT PROXY STATEMENT/PROSPECTUS BECAUSE IT WILL CONTAIN
INFORMATION IMPORTANT TO INVESTORS. WHEN COMPLETED, THE JOINT PROXY
STATEMENT/PROSPECTUS WILL BE MAILED TO THE SHAREHOLDERS OF EACH COMPANY. COPIES
OF THE JOINT PROXY STATEMENT/PROSPECTUS WILL BE AVAILABLE FOR FREE BY CONTACTING
THE HAIN FOOD GROUP OR CELESTIAL SEASONINGS, INC. OR AT THE SEC'S WEBSITE AT
WWW.SEC.GOV.
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