Olam shells out $114m for US peanut company

Agri-business group Olam International has acquired a peanut shelling company in the United States for US$85 million (S$114.6 million).

Called Brooks Peanut Company, it is the sixth-largest peanut sheller in the US and is based in Samson, Alabama in the productive south-east peanut growing region.

The move strengthens Olam's market position as the third-largest peanut sheller in the US and helps expand its sourcing network into new areas in Alabama and Florida, the company said in a statement yesterday.

"With Brooks, Olam can further differentiate its product offering to customers globally and mitigate climate risks with a diversified presence across different growing areas," the statement added. The purchase follows Olam's acquisition of US peanut sheller McCleskey Mills Inc in December 2014.

The latest acquisition will be funded by a combination of internal accruals and existing debt facilities, and is expected to be completed in the third quarter.

"Given our strengths in the US peanut industry and global marketing reach, we feel quite confident that we will be able to take Brooks to its full potential fairly quickly," said Mr Anupam Jindel, the president of Olam's global peanut business.

Brooks president Barrett Brooks said: "I believe the combination of our modern processing assets and strong procurement franchise with Olam's expertise in peanut processing, marketing and risk management will be a very successful one."

Olam has been operating in the US peanut industry since 2007 through its acquisition of Universal Blanchers, which specialises in blanching and high quality ingredient manufacturing of peanuts.

A version of this article appeared in the print edition of The Straits Times on June 10, 2016, with the headline 'Olam shells out $114m for US peanut company'. Print Edition | Subscribe