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Olam acquires Alabama's largest peanut sheller for US$85m
OLAM International on Thursday said it has acquired a 100 per cent interest in the largest Alabama-based sheller, Brooks Peanut Company, at its enterprise value of US$85 million.
Brooks is currently the sixth largest peanut sheller in the US. The latest acquisition follows Olam's purchase of US peanut sheller McCleskey Mills Inc, in December 2014.
Enterprise value is typically taken as a company's market value after including debt, minority interest and preferred shares, and deducting its total cash and cash equivalents.
Olam said this move would strengthen its market position as the third largest peanut sheller in the US, and would help to expand its sourcing network into new areas in Alabama and Florida.
"With Brooks, Olam can further differentiate its product offering to customers globally and mitigate climate risks with a diversified presence across different growing areas," Olam said in a statement.
The acquisition will be funded by a combination of internal accruals and existing debt facilities. The transaction is expected to be completed by the third quarter of this year, and to be earnings accretive in 2016.