Olam's OFI to acquire Canada's Club Coffee at enterprise value of $162m
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The acquisition of Club Coffee will expand OFI’s private label capabilities in North America.
PHOTO: OLAM INTERNATIONAL
Helene Tian
SINGAPORE (THE BUSINESS TIMES) - Olam Group on Tuesday (April 26) said that Olam Food Ingredients (OFI), its wholly owned food ingredients unit, will acquire Canada's Club Coffee at an enterprise value of C$150 million (S$162 million).
Club Coffee is one of Canada's largest coffee roasters and packaging solutions providers to the "at home" segment. It serves private label customers and retail brands from its facilities in Toronto.
The acquisition of Club Coffee will expand OFI's private label capabilities in North America, agri-food giant Olam said in a bourse filing. It expects the transaction to be completed in the second quarter of 2022, subject to regulatory approval and other conditions.
The C$150 million consideration takes into account Club Coffee's business performance and prospects, as well as the capabilities and synergies between the Canadian company and OFI.
The deal will be funded from OFI's existing cash and debt facilities. Excluding acquisition-related costs and charges, the acquisition is expected to be accretive to current-year earnings, OFI added.
It noted that the private label and co-manufactured channel is an attractive, high-value and growing part of its portfolio.
OFI was created in early 2020 following a reorganisation within Olam International. It consists of businesses of cocoa, coffee, dairy, nuts and spices.
In March, it announced a delay in its plans for an initial public offering (IPO). It said it no longer expects its planned IPO to take place in the second quarter of 2022 as previously anticipated. This came in the light of current market conditions due to the ongoing conflict in Ukraine.
It added that it remains committed to pursuing a public listing of the business and will "evaluate the appropriate timing of such a listing on an ongoing basis, taking into account prevailing market conditions".
Shares of Olam Group were trading at $1.69, down two cents or 1.2 per cent, at 11.42am, after the announcement.
