29 Apr 2021 — Olam Food Ingredients (OFI) is acquiring US-based private label spices and seasonings manufacturer Olde Thompson at an enterprise value of US$950 million through its wholly-owned subsidiary Olam Holdings Inc. The deal is subject to customary closing conditions, and the transaction is expected to close in Q2 2021.
Olam Holdings Inc. will acquire Olde Thompson from Kainos Capital and Olde Thompson’s management shareholders, subject to net working capital adjustment at closing.
The consideration was arrived at on a willing-buyer, willing-seller basis and implies an EV/EBITDA multiple of approximately 11.5 times or approximately 8.5 times, including expected synergies.
The acquisition of Olde Thompson is expected to be earnings and margin accretive to OFI from the first year onward and generate potential EBITDA synergies of US$25-30 million.
This acquisition reinforces OFI’s growth strategy of being a key player in providing sustainable, natural, value-added F&B ingredients and solutions to enjoy healthy and tasty products.
Touted as “transformative” for OFI’s spices business, the move will also create a substantive growth platform for OFI to provide similarly sustainable and innovative retail solutions across OFI’s other products.
“This transaction builds on our long 15-year partnership with Olde Thompson and is a logical move to combine our ‘back-end’ strengths in global origination and sustainable supply chains, with Olde Thompson’s ‘front-end’ capabilities in providing retail spice solutions to many major US retailers,” says A. Shekhar, OFI’s CEO.
“Growing our offerings of private label solutions is right at the heart of OFI’s strategy – and within that spices are one of the most attractive and growing categories, especially in the US. This will enable us to offer consumers a comprehensive range of bold, authentic, natural taste and flavors with end-to-end traceability.”
Private label business
Established in 1944, Olde Thompson is a leading manufacturer of spices, seasonings, baking ingredients and spice-related housewares in the US.
It has led and benefited from the increased penetration of private labels in the spices and seasonings space and the growing demand for healthy, natural, organic, clean-label spices and ethnic, savory flavors.
With two highly automated bi-coastal facilities in Bayonne, New Jersey and Oxnard, California, Olde Thompson has built an effective formulation, blending, packaging and distribution capacity to serve customers across the US.
It has also built long-term relationships with a diverse group of blue-chip retail customers across the club, mass, grocery and discount store channels.
“For our customers, this partnership pushes Olde Thompson to the forefront of sustainable innovation as it provides access to OFI’s extraordinary international sourcing capabilities and spice expertise that will allow us to provide a new level of traceability and transparency to the marketplace,” says David Sugarman, CEO of Olde Thompson.
Greg Estep, CEO of OFI’s spices business, also comments: “Our global origination and sustainable spice supply chain along with Olde Thompson’s expertise in private label is going to be truly complementary and transformative for our spices business.”
“We can now deliver greater value to our customers by combining Olde Thompson’s reach and capabilities in blending, product formulation and packaging to our seed and field management programs, ingredient processing capabilities and the differentiated transparency and traceability that our AtSource platform delivers.”
Edited by Elizabeth Green
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