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Hain Celestial Group Inc.  (HAIN) , a pure-play natural and organic food company, is close to reaching an agreement with an activist investment fund that would bring on six new directors and install the insurgent fund's manager, Glenn Welling, onto a newly formed strategic review committee set up to consider strategic options such as a sale, according to a person familiar with the situation. 

The settlement comes less than three months after Welling and his activist fund, Engaged Capital LLC, launched a campaign and director battle at Hain. In late June, Welling said he was seeking to replace seven of the company's eight directors and was pushing for a variety of changes.

According to a person familiar with the situation, Welling was interested in pushing the company to boost revenue through a new stronger approach to sales and promotion but that he also wanted to see the company consider selling itself to another larger packaged foods company.

As part of a proposed settlement, three Hain directors won't run for re-election and six new directors will be installed on the board, according to the person. After the board is restructured it will have 11 directors including Welling, he added. In addition, Centerview Partners, an investment bank, has been retained to help with the review, he said.

It is unclear whether the other new directors are board members chosen by Welling's team or if they were mutually agreed upon by the two sides.

Nevertheless, the restructured board makes it much more likely that Hain will consider selling itself in the near future. The Deal, a division of TheStreet, had reported in July that Welling's involvement likely meant M&A was a serious option for the last remaining pure-play natural and organic food company. Welling has a mostly successful track record when it comes to organic and healthy food companies and M&A.

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Boulder Brands, which makes Earth Balance and Evol Foods, was sold to Pinnacle Foods in 2015 shortly after Engaged became involved. Also, Engaged Capital helped negotiate an $85 million investment by Oaktree Capital last year at Canadian natural and organic foods processor SunOpta Inc. (STKL) , an investment that helped drive the company's shares up to its recent price of around $8.30 a share from about $6 at the time.

As far as acquisitions go, some traditional packaged food companies could be interested in Hain or some of its brands, as they seek to increase their exposure to organic foods. These include PepsiCo. Inc.  (PEP)  , Campbell Soup Co. (CPB) , Hormel Foods Corp. (HRL) , General Mills Inc. (GIS) , Kraft Heinz Co.  (KHC) , Nestle SA, and Unilever NV (UN) . A Hain auction would follow France's Danone SA's $12.5 billion acquisition of organic foods company WhiteWave Foods Co.

Alternatively, Hain could seek to sell some of its brands rather than the whole business, as a means of raising capital for stock buybacks or dividends.

A key driver behind Welling's campaign and the company's potential M&A future is its move on June 22 to issue its 2016 annual report, after 13 months without filings after the company corrected what it said were "immaterial errors" for prior period financial statements. 

A Hain spokesperson did not return a call for comment. 

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