Olam to sell real estate assets of US onion, garlic processing plant for US$110.3m

OLAM International is selling the real estate assets of its onion and garlic processing facility in California to Chicago-based investment management firm, Mesirow Financial, for US$110.3 million as part of its "strategic plan", the food and agri-business firm said on Tuesday.

The mainboard-listed company has also entered into a tiered revenue sharing arrangement with Mesirow, with whom it will share a part of the annual revenue from operating the assets for a period of 25 years.

The transaction is expected to be completed in December this year, subject to customary conditions.

On completion, Olam will receive cash proceeds of US$110.3 million, and is also expected to book a one-time pre-tax capital gain of about US$97 million. Stream Capital Partners is the financial adviser to Olam in this transaction.

Said Greg Este, Olam's managing director and CEO of spices: "As a large, leading financial services firm in the US, Mesirow has been a long-term partner of many large corporations in real estate transactions, so I am confident our partnership will go a long way towards creating value for our respective stakeholders.

"I am excited about our next phase of growth as we can now redeploy part of the capital released for investments in product innovation and value-added services to create further value for our customers."

Olam shares closed at S$1.82 on Monday, down 0.55 per cent, or one Singapore cent.