Olam bags sixth biggest peanut shelling business in US for $114.3m
It’s expanding sourcing networks in Alabama, Florida.
Olam has snapped up the sixth largest peanut shelling business in the US, Brooks Peanut Company (Brooks), at an enterprise value of US$85m ($114.3m).
According to its news release, Olam expects the deal to bolster the company’s market position as the third largest peanut sheller in the US. In addition, Brooks’ status as the biggest sheller in Alabama helps Olam expand its sourcing network into new areas in Alabama and Florida.
The acquisition will be funded by a combination of internal accruals and existing debt facilities. Olam expects to close the deal by 3Q16, and anticipates it to be earnings accretive in 2016.
Olam further reports it expects the deal to meet the targeted earnings before interest, tax, dividends, and amortisation (EBITDA) on invested capital range of 13-16% from the first year of operations in 2017.