Hain Celestial has sold its Orchard House own label juice business to private equity firm Elaghmore as it continues to simplify its European portfolio.

The price tag for the deal is undisclosed, but it is understood the PE fund paid about £25m for the producer of prepared fruit and freshly squeezed juice.

Orchard House supplies retailers, on-the-go food outlets, foodservice providers and manufacturers across the UK, including M&S, Morrisons, Sainsbury’s, Tesco and Pret a Manger.

The business is based in Northamptonshire, with additional facilities in Gateshead, employing a total of 1,000 staff and turning over more than £130m annually.

Hain acquired Orchard House from Wellness Foods in December 2015 in a move to make its portfolio healthier.

However, the business was considered non-core by Hain as the US group looks to reposition its portfolio back towards a focus on its domestic North American market.

Rumours in the City continue to persist that Hain plans to sell its UK Hain Daniels business, which includes Ella’s Kitchen, New Covent Garden Soup, Hartley’s, Yorkshire Provender and Sun-Pat. The group has already disposed of Tilda, Europe’s Best, Casbah, Arrowhead Mills and SunSpire, among others.

Elaghmore said its hands-on approach meant it would support the Orchard House management team as the business enters its next growth stage.

Elaghmore founders Andy Ducker and David Manning have experience working with a global fruit business as investors and executives at freeze-dried ingredients group Chaucer Foods. The pair developed and subsequently sold Chaucer to Japan’s Nagatanien Holdings in a 2016 deal worth $130m.

Ducker said: “Orchard House is a market-leading business supplying products many UK customers buy daily.“We are very proud we will be part of Orchard House’s growth and development as we look beyond Covid-19. Orchard House is a flagship investment for Elaghmore, and our financial strength and operational expertise means we can help Orchard House prosper.”

Hain Celestial CEO Mark Schiller added: “The divestment of this complex, non-core asset fully aligns with our brand simplification and strategic transformation processes.

“By divesting this business, which was negatively impacted by the Covid-19 pandemic, the remaining Hain Celestial business will show immediate improvement in its growth rate and margins, allowing us to reinvest capital behind the strength of the remaining international platform.

“We remain confident in our ability to continue to improve our overall margin and cashflow profiles to fuel sustainable long-term growth and profitability.”

Spayne Lindsay acted as financial advisor and DLA Piper UK acted as legal counsel to Hain Celestial. Elaghmore was advised by global investment bank Houlihan Lokey, financial and tax advisers EY and Squire Patton Boggs provided legal advice.