November 17, 2021
/worlds-billionaires Asia Billionaires Business Forbes Asia Investing Markets Money

Singapore’s Olam To Buy U.S. Spice Maker For $950 Million Ahead Of Unit’s IPO

Singapore-listed Olam International said its food ingredients subsidiary is buying Olde Thompson, a U.S.-based maker of private label spices and seasonings, at an enterprise value of $950 million.

The agricultural commodities trader said in February that it has appointed financial and legal advisers to prepare for the initial public offering of Olam Food Ingredients (OFI), which supplies cocoa, coffee, nuts, spices and dairy. OFI said the acquisition of Olde Thomson will transform its spice business and be earnings accretive from the first year onwards.

“Growing our offerings of private label solutions is right at the heart of OFI’s strategy–and within that spices is one of the most attractive and growing categories, especially in the U.S.,” OFI’s CEO Shekhar Anantharaman said. “This will enable us to offer consumers a comprehensive range of bold, authentic, natural taste and flavors with end-to-end traceability.”

The transaction, which is expected to be completed in the second quarter of 2021, is expected to generate potential EBITDA synergies of as much as $30 million, OFI said.

Olam was founded in 1989 by Sunny Verghese, who had regularly featured in the list Singapore’s 50 Richest until 2011. He lost his place in the rankings after Olam’s shares tumbled in 2012 as U.S. short seller questioned the company’s accounting practices and viability.

In 2014, Singapore state-owned investment firm Temasek boosted its shareholding in Olam and now holds 53%. A year later, Japan’s Mitsubishi invested $1.1 billion in the company and currently holds 17%.

Verghese, who has a 4.3% stake and currently is the group’s CEO, has been driving Olam’s expansion in recent years through acquisitions such as the purchase of Archer Daniels Midland for $1.2 billion in 2015, which, according to DBS Group Research, has made Olam one of the top three global cocoa processors.