Mentioned in Singapore Olam International announced the acquisition of Olde Thompson, a manufacturer of private label spices and seasonings headquartered in the United States, by its food ingredients subsidiary for an enterprise value of $950 million.
In February, the agricultural commodities trader announced the appointment of financial and legal advisors to assist with the preparations for the initial public offering of Olam Food Ingredients (OFI), a supplier of cocoa, coffee, nuts, spices, and dairy. OFI stated that the Olde Thomson acquisition will change its spice business and will be earnings accretive in the first year.
“Expanding our private label offerings is central to OFI’s strategy–and spices is one of the most attractive and growing categories, especially in the United States,” OFI CEO Shekhar Anantharaman said. “This enables us to provide customers with a broad selection of bold, authentic, natural tastes and flavors that are completely traceable from start to finish.”
The deal, which is expected to close in the second quarter of 2021, is expected to produce up to $30 million in EBITDA synergies, OFI said.
Sunny Verghese created Olam in 1989, and he was a regular on the list of Singapore’s 50 wealthiest until 2011. He fell out of the rankings in 2012 as US short sellers challenged the company’s accounting practices and profitability.
Temasek, Singapore’s state-owned investment company, increased its stake in Olam to 53% in 2014. Mitsubishi invested $1.1 billion in the firm a year later and now owns 17%.
Verghese, who owns 4.3 percent of the company and serves as its CEO, has been instrumental in the company’s recent expansion through acquisitions such as the $1.2 billion purchase of Archer Daniels Midland in 2015, which elevated Olam to the top three global cocoa processors, according to DBS Group Research.