Let the battle begin.

Hain Celestial Group Inc., (HAIN) the company behind a variety of organic products including Terra Chips, shares were up more than 9% on Friday morning after activist investor Glenn Welling of Engaged Capital LLC said he has launched a change-of-control director election contest that could include a push to have the company sold.

Specifically, Hain was up by 5% in after hours trading to $35.76 a share on news of the campaign. The company's shares dropped precipitously in August 2016 after it announced at the time that it was delaying earnings and expected to miss its own guidance over revenue recognition problems.

Nevertheless, the situation seems to be coming back under control. Hain reported its annual 2016 report on June 22, after 13 months without filings, after the company corrected what it said we're "immaterial errors" for prior-period financial statements. Its revenue is down slightly so far this year, and its profits dropped recently by half, compared to the company's results over the same period last year. Hain hasn't had an annual meeting since 2015. However, with its reports back on track expect an annual meeting and a boardroom skirmish to take place in the coming months. 

In a securities filing, reporting a 9.9% stake, Engaged said it had discussions with the company's board and may have further discussions. Welling did not disclose the names of the seven director candidates he has submitted to Hain. However, Welling, who has launched a number of successful director election contests in recent years, will be seeking to replace seven of the New Hyde Park, NY-based company existing eight directors. In the filing, Welling suggested that Engaged could push for a variety of changes at the company including a "sale" of the business as a whole or in parts.

According to a person familiar with the situation, Welling is likely interested in pushing Hain to boost revenue through a new stronger approach to sales and promotion. Alternatively, the activist may seek to have Hain sold to another packaged foods company, he added.

It's very likely that a number of different buyers could be interested in the company as a whole or in pieces, as packaged foods companies seek to increase their exposure to organic foods, he added, including 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)

Hain Celestial has a variety of well-known brands beyond Terra chips, including Celestial Seasonings teas and Earth's Best Organic. It has dozens of products, including dairy and non-dairy foods, baby foods, frozen foods and deserts. The company says its goal is to be the leading marketer and maker of organic and natural better-for-you products.

Welling's fund accumulated shares between May 1 and June 28 at prices ranging from $32.12 a share to $36.89. 

PepsiCo. is a holding in Jim Cramer's Action Alerts PLUS Charitable Trust Portfolio. Want to be alerted before Cramer buys or sells PEP? Learn more now.

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