Hain Celestial and Engaged Capital enter cooperation agreement

Janelle Clausen

Hain Celestial, an organic and natural food producer in Lake Success, and California-based Engaged Capital entered a cooperation agreement on Sept. 28, according to a regulatory filing, potentially setting the stage for Engaged Capital to have a majority on the board of directors.

The agreement adds six new directors, temporarily setting the board at 14 members. Three of Hain Celestial’s current directors will not be up for re-election at the annual meeting on Nov. 16, thus trimming the board to 11 members.

Three of the members include Shervin Korangy, Celeste Clark, and Engaged Capital founder and CEO Glenn Welling. The other three directors, Dawn Zier, Jack Sinclair and Dean Hollis, will have terms expiring at the 2016-2017 annual meeting, although they can be re-elected.

Irwin Simon, founder and president of Hain Celestial, said in a statement that the company has acted on “a number of strategic initiatives” that will “help drive our next phase of growth.” The new team, he added, will make them even stronger.

“In line with our commitment to strengthen our leadership team, including our board of directors, I am pleased to announce the addition of six, highly-qualified independent directors, who will add valuable industry experience and new perspective to our board,” Simon said.

Welling echoed that sentiment, saying that the board will benefit from a new infusion of skills.

“The enhanced board, which now includes a majority of newly appointed directors, is an important step towards ensuring Hain Celestial continues to create extraordinary value for shareholders,” Welling said in a statement.

Additionally, according to a filing with the U.S. Securities and Exchange Commission, there will also be four-member working group formed to review Hain Celestial’s “portfolio of businesses, brands and operating strategy, evaluate alternatives to create shareholder value and make recommendations to the board regarding such alternatives.”

Welling will also be on that board.

This group will remain in place until the 2018 annual meeting, which has not yet been scheduled.

This follows reports from June that Engaged Capital had a 10 percent stake in Hain Celestial and nominated seven members to the company’s eight-member board to try and overhaul the company.

It also followed a decline of more than 6 percent in U.S. sales in the first nine months of the fiscal year prior to June and flat sales overall compared to the same period last year.

Hain’s stocks had taken a hit when it revealed its accounting practices were under investigation by the Securities Exchange Commission in February, as well as a months-long delay of releasing their financial reports.

They had also sought to spice up their prospects earlier this year with a series of strategic acquisitions of the Yorkshire Provender, a premium soup company, and Better Beans Co.

Some of Hain Celestial’s associated brands include Avalon Organics, Bearitos, Celestial Seasoning and BluePrint Organic.

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