Olam unit eyes better margins, earnings with acquisition of spice supplier Olde Thompson

OLAM Food Ingredients (OFI), a unit of agri-food giant Olam International, is looking forward to better margins and earnings after it seals the acquisition of US private-label spice supplier Olde Thompson for an enterprise value (EV) of US$950 million in the second quarter of 2022.

A Shekhar, OFI's chief executive, told The Business Times that the acquisition will "dramatically expand" the group's private label solutions in the spices segment. The private label business makes products for sale under another company's brand.

This part of OFI is relatively small compared to the units dealing in coffee and nuts. Mr Shekhar said the additional scale could give the spices segment incremental margin improvements, although complex and fragmented supply chains and the relative price inelasticity of spices already means it commands one of the higher margins among the OFI units. (see Amendment note)