Why The Hain Celestial Group, Inc. (HAIN)’s Acquisitions Consistently Perform

I as an individual am about brands, brands, brands. I would say this here, brand equity, brand equity, brand equity. In regards to acquisitions; so I have never started a company from scratch, started a brand from scratch like Celestial Seasonings, Terra Chips or whatever. My philosophy is number one, go out and find a good brand in a good category where an entrepreneur has created something already. And with our marketing expertise, with our distribution expertise, which is operational expertise, how do we take it to the next level? And to find something where they’ve gone out and made the mistakes, they’ve done a lot of the groundwork, maybe burned through all their money and how do we then take it to the whole other level and put our experience behind that, and that’s one of the things we’ve done.

I’m very disciplined on what we’ll pay for acquisitions because there’s nothing worse than doing a bad acquisition and really overpaying for it. There are times you just don’t recover from that and you see companies do that. what also is very important to us is when I look at Hain I kind of say this here, Okay, if this was waterfront property and I owned a piece of waterfront, I owned a piece of property on the waterfront, if I keep buying up property along the waterfront, each piece becomes more valuable because I own most of the waterfront. And that’s what I look at if we buy a company, how does it help the overall company and how do we continuously to create value? Because what you don’t want to do is go out and do an acquisition that’s dilutive, it’s not fair to your other brands. You don’t want to go out and do an acquisition; there’s no growth because your accretion on growth from the other brand. And with that, how do you go out and take a product that you really could utilize your infrastructure of sales, marketing, distribution, procurement and how does that fit in? So we don’t buy something that doesn’t fit with what we’re doing today; it would not make sense.

So they are very much the disciplines and again, at the end of the day, the financial disciplines really, really are key to it. It’s not just to say, We did another deal. What I never wanted us to become were acquisition junkies.

The article Why Hain Celestial’s Acquisitions Consistently Perform originally appeared on Fool.com and is written by Brendan Byrnes.

Brendan Byrnes has no position in any stocks mentioned. The Motley Fool recommends Hain Celestial. The Motley Fool owns shares of Hain Celestial.

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