Filed by The Hain Food Group, 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: The Hain Food Group, Inc.
Commission File No. 0-22818
On March 6, 2000, The Hain Food Group, Inc., a Delaware corporation ("Hain")
and Celestial Seasonings, Inc., a Delaware corporation ("Celestial"),
jointly issued the following press release:
THE HAIN FOOD GROUP TO MERGE WITH CELESTIAL
SEASONINGS, INC., THE MARKET LEADER IN SPECIALTY TEAS
-- Combination Creates Powerhouse in the Natural Organic
Foods and Beverage Category --
-- Transaction Expected to be Immediately Accretive to Earnings
Per Share --
UNIONDALE, NY AND BOULDER, CO -- March 6, 2000 -- The Hain Food Group
(NASDAQ:HAIN), the leading natural and organic food company, and Celestial
Seasonings, Inc. (NASDAQ:CTEA), the market leader in specialty teas, today
announced that they have signed a definitive agreement to combine their
operations. The transaction is expected to be accretive to Hain's earnings per
share in the first year of combined operations, excluding non-recurring charges
associated with the merger.
The name of the combined company will be The Hain Celestial Group, Inc.,
and it will continue to trade under the stock symbol HAIN. Irwin Simon,
currently president and chief executive officer of The Hain Food Group, will be
chairman, president and chief executive officer of The Hain Celestial Group
Inc., and Mo Siegel, currently chairman of Celestial Seasonings, will be
vice-chairman of The Hain Celestial Group, Inc. Hain's Board of Directors will
increase from eight to eleven, with Mo Siegel and two other members of Celestial
Seasonings' Board joining the expanded Board.
The consolidation further establishes Hain's leading position in natural
foods, in which it currently maintains major shares in 12 of the top 15
categories. By leveraging Celestial
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Seasonings' leading market position, The Hain Celestial Group, Inc. will become
the leader in the third most important category and, at the same time, will
capitalize on Celestial's leading market presence in the food, drug and retail
mass market channel. In addition, this combination will benefit from the
alliance between Hain and H. J. Heinz by expanding distribution of Celestial
Seasonings' specialty teas through Heinz's international and foodservice
channels. Combined total pro forma sales for The Hain Celestial Group are
expected to be approximately $430 million for the fiscal year ending June 30,
2000.
Under the terms of the agreement, which has been unanimously approved by
the Boards of Directors of both companies, 1.265 shares of Hain common stock
will be exchanged for each outstanding Celestial Seasonings share. Based on the
closing market price of Hain stock an Friday, March 3, 2000, the transaction has
a value of approximately $390 million, including the assumption of net debt. The
merger is expected to be accounted for as a pooling of interests and will be
treated as a tax-free reorganization for all shareholders.
Mr. Simon remarked, "Celestial Seasonings has one of the most recognized
consumer brand names in the food industry. This merger forms a powerhouse in the
natural foods industry, and creates immediate value for the shareholders of both
companies. The transaction combines Hain, with its experience in selling to
specialty natural foods markets, and Celestial Seasonings, which has great
expertise in successfully reaching the retail mass market. The combination
consolidates Hain's position at the top of the natural foods market, gives us
leadership in the fast-growing category of specialty teas, and creates
tremendous growth opportunities by leveraging the combined selling and
distribution strengths of both brand portfolios."
Mr. Siegel commented, "I am thrilled that Celestial Seasonings will combine
with Hain, as our distribution channels are extremely complementary. We sell 80%
of our products through retail mass market channels; Hain sells approximately
60% through natural foods channels. This combination will expand the reach for
all of our brands. This consolidation will accelerate growth for both companies
in the fast growing natural products industry. It fulfills our long-standing
intention to have the size and capabilities to make a significant positive
difference in the health habits of millions of people."
"We expect that Celestial Seasonings' investors and employees will greatly
benefit from the growth opportunities provided by Hain," noted Steve Hughes,
president and CEO of Celestial Seasonings, Inc.
The US natural and organic food category represents a $20 billion business
growing 15 to 18 percent annually. The US market for natural and organic foods
includes $12 billion in sales in specialty stores (natural and organic food
shops) and $8 billion through traditional supermarkets.
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Last year, Celestial Seasonings' sales of specialty teas were in excess of
$100 million, representing a 50% market share in the herbal tea segment and 32%
of the total specialty tea Category. Celestial Seasonings currently sells more
than 50 varieties of teas, including herbal, green, wellness, and chai, in major
supermarkets and natural food markets in the US and some 40 other countries.
Completion of the transaction, which is subject to the approval of the
stockholders of both companies and customary regulatory approvals, is expected
to occur in approximately June, 2000, before the beginning of Hain's fiscal year
2001.
About The Hain Food Group
The Hain Food Group, headquartered in Uniondale, NY, is a natural, specialty and
snack food company. The Company is a leader in 12 of the top 15 natural food
categories, with such well-known natural food brands as Hain Pure Foods(R),
Westbrae(R), Westsoy(R), Arrowhead Mills(R), Health Valley(R), Breadshop's(R),
Casbah(R), Garden of Eatin(R), Terra Chips(R), DeBoles(R), Earth's Best(R), and
Nile Spice(TM). The Company's principal specialty and snack food product lines
include Hollywood(R) cooking oils, Estee(R) sugar-free products, Weight
Watchers(R) dry and refrigerated products, Kineret(R) kosher foods, Boston
Better Snacks(R), Hain's Premium Snacks(R) and Alba Foods(R). Hain's Internet
website is www.thefoodgroup.com.
About Celestial Seasonings
Celestial Seasonings, Inc. is the largest manufacturer and marketer of specialty
hot teas in the United States. The company makes a broad selection of flavorful
Herbal, Green, Wellness, Organic and Chai teas. The company's most recognized
tea products include Sleepytime(R) --America's favorite herb tea--Lemon
Zinger(R), Red Zinger(R), and Tension Tamer(R). The company also markets a line
of herbal supplements including Ginseng Energy(TM), Gingko Sharp(TM) and Mood
Mender(TM) with St. John's Wort. Celestial's Internet website is
www.celestialseasonings.com.
Statements made in this Press Release 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.
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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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