OLAM International Ltd announced on Monday that it has bought Amber Foods for a total enterprise value of US$275 million, doubling its wheat milling capacity and propelling the Singapore commodities group to a leading pasta player in Nigeria.
Amber owns the wheat milling and pasta manufacturing assets of the BUA Group in Nigeria, through its wholly-owned subsidiary, Quintessential Foods Nigeria. The BUA Group is a diversified foods and infrastructure business group in Nigeria and is among the top five wheat millers in the country with wheat milling and pasta manufacturing capacities of 3,760 and 700 metric tonnes per day respectively.
The acquisition will be funded through a combination of debt and internal accruals. It is expected to be earnings accretive from the first year after consolidation. Olam expects the acquired business to generate an Ebitda to invested capital return of 13-16 per cent when it reaches steady-state in 2018.