Olam Food Ingredients (ofi), a wholly-owned subsidiary of Olam Group, has entered into an agreement to acquire Club Coffee L.P. for CA$150 million ($161.7 million) to its ‘At Home’ segment.
Club Coffee, which has been operating since 1906, is one of Canada’s largest coffee roasters and packaging solutions providers, serving private label customers and retail brands from its facilities in Toronto.
According to ofi, the acquisition is aligned with its growth strategy to deliver sustainable, natural, value-added food and beverage ingredients and solutions to its customers across the globe.
The consideration was arrived at on a willing buyer, willing seller basis. It also took into account the business performance and prospects of Club Coffee, and the capabilities and synergies between ofi and Club Coffee.
The acquisition will be funded from existing cash and debt facilities.
It is also expected to be accretive to ofi’s current year earnings.
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The transaction is expected to be completed in the 2QFY2022.
Vivek Verma, managing director & CEO of the coffee arm at ofi says, “I am delighted that Club Coffee will soon become part of ofi. Both companies share a focus on high quality sustainable products and have proven capabilities in contract manufacturing and in the high growth private label channel.”
“Increasing our range of private label solutions is right at the heart of ofi’s growth strategy. Combining Club Coffee’s expertise with ofi’s sustainable sourcing, we can use our sustainability insights platform AtSource to deliver product traceability to our customers, as well as giving them the ability to influence the wider economic, social and environmental impacts of our products and their supply chains,” he adds.
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Club Coffee CEO John Pigott says, “The ofi acquisition of Club Coffee is great news for our customers, employees and all other stakeholders. ofi's sustainable green coffee supply chain business complements Club Coffee’s innovative and sustainable packaging platform. Together, we now have the capacity and resources to accelerate new comprehensive value-added solutions with the aim of benefitting our customers. We believe we are well-positioned to meet the increasing consumer demand for sustainability and innovation.”
Shares in Olam Group closed 1 cent lower or 0.58% down at $1.71.
