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Olam’s OFI to acquire Club Coffee of Canada for an enterprise value of $162 million

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SINGAPORE (THE BUSINESS TIMES) – Olam Group announced on Tuesday (April 26th) that Olam Food Ingredients (OFI), its wholly-owned food ingredients unit, will acquire Canada’s Club Coffee for an enterprise value of C$150 million. (162 million Singapore dollars).

Club Coffee is one of Canada’s largest coffee roasters and packaging solution providers for the “at home” segment. It serves private label customers and retail brands from its Toronto facilities.

The acquisition of Club Coffee will expand OFI’s private label capabilities in North America, agribusiness giant Olam said in a stock market filing. It expects the transaction to close in the second quarter of 2022, subject to regulatory approval and other conditions.

The C$150 million consideration takes into account the performance and business prospects of Club Coffee, as well as the capabilities and synergies between the Canadian company and OFI.

The deal will be funded through OFI’s existing liquidity and debt facilities. Excluding acquisition-related costs and charges, the acquisition is expected to be accretive to current year earnings, OFI added.

He noted that the private label and co-manufacturing channel is an attractive, high-value and growing part of his portfolio.

OFI was created in early 2020 following a reorganization within Olam International. It consists of cocoa, coffee, dairy, nut and spice businesses.

In March, it announced a postponement of its initial public offering (IPO) plans. It said it no longer expects its planned IPO to take place in the second quarter of 2022 as previously expected. This happened in light of current market conditions due to the ongoing conflict in Ukraine.

He added that he remained committed to pursuing a public listing of the company and “will assess the appropriate timing of such a listing on an ongoing basis, taking into account prevailing market conditions.”

Olam Group shares were trading at $1.69, down two cents or 1.2%, as of 11:42 a.m. after the announcement.