January has certainly got off to a bang! Since the start of the new year we’ve seen bids and deals taking place left, right and centre. One that’s particularly caught my eye is the recent acquisition of rice brand Tilda by US foods giant Hain Celestial. Tilda has been owned by the Thakrar family for the last 40 years, making it a real success story. Given this context, what’s especially interesting is that the founding family were just as happy as Hain with the deal. This got me thinking about why some founder-led companies are more ready to move on than others, and what makes the Tilda deal such a mutually beneficial arrangement.
In many ways, Tilda is just one more step in Hain’s recent acquisitive push – in 2012, it bought up the Hartley’s, Sun-Pat and Robertson’s spread brands, and its purchase of high-flying baby food manufacturer Ella’s Kitchen hit headlines in 2013. Tilda is slightly different, however, because of its international footprint. As just-food.com said this week, the brand is present in 40 countries around the world, including existing operations in the Middle East and North America, two territories Hain is actively looking to diversify in. Registering revenues of US$190m last year, the business is also on an upward financial trajectory.
All this naturally makes the deal an attractive one for Hain. But, then, why would the family be just as happy to have the firm taken out of their hands? Tilda’s Shilen Thakrar has stated that the company “are delighted to entrust our family’s business into the capable hands of [Hain CEO] Irwin Simon and his team.” Of course, the total purchase price of around US$357m is a substantial fee, but founders’ ties often go deeper than just money. It’s interesting that the Thakrar family went into more detail when discussing Tilda’s sale, saying: “we believed Tilda needed to align with a company with the full resources, size and scale of Hain in order to realise the full potential of our rice brands.” This is a level-headed way of looking at the business that isn’t necessarily typical of founders, who are sometimes the last to realise when an organisation has outgrown their expertise.
It’s certainly true that Hain will be able to provide Tilda with a stable base for future growth. In addition to this, it has been announced that Tilda’s existing executive management team will make the transition to Hain, which provides vital continuity and an important link to the company’s past. Taking all this together, this makes Tilda and Hain an uncommonly good match! As the Grocer said in an article about family businesses last year, “the longest-standing businesses work as families do, with value and natural ambition.” Sometimes, the best form of ambition is to recognise the ideal time to transition leadership, something the Thakrar family appear to have done a good job at.
Time will tell whether the partnership between Tilda and Hain pays dividends, but there is no question that the business’s evolution looks like it has got off to a good start. Can you think of any other companies who have harmoniously moved on from founder ownership? Let me know at moira@thembsgroup.co.uk, and have a brilliant weekend.