Olam Food Ingredients (OFI) has agreed to acquire Mizkan America’s US-based chili pepper business (CPB) for $108.5 million.
The deal, which is being made through Olam subsidiary Olam Americas, marks the first major acquisition for OFI since the new Olam International operating group was created earlier this year.
Based in Deming, New Mexico, CPB is a supplier of green chilis, jalapeños and enchilada sauces.
Olam’s spices business, part of OFI, operates a red chili manufacturing facility in Las Cruces, New Mexico, less than 60 miles from Mizkan’s Deming operations.
The close proximity is expected to bring operational advantages across Olam’s red and green chili businesses.
“Combining CPB’s specialty and green chili range with our red chili portfolio…means we can deliver a wider range of ingredient solutions for customers looking to satisfy the rising demand for authentic Mexican flavours – already the third most popular cuisine in the country,” said Olam Spices CEO, Greg Estep.
“We are further pleased that in operating CPB, Mizkan shares the same focus on sustainable agriculture and quality control, maintaining close farmer relationships and fully integrated supply chains. This also allows Olam Spices to strengthen and expand our chili sourcing network — notably in Hatch Valley, New Mexico.”
OFI CEO, A. Shekhar, added: “CPB’s chili operations are second to none, with a strong heritage, steady financial performance and leading shares for all its products. Further, CPB supplies grocery and retail channels that offer increasing co-manufacturing opportunities in the US and Asia for many of our other products.”
The transaction is subject to US antitrust regulatory approval and customary closing conditions, which are expected to complete in January 2021.
© FoodBev Media Ltd 2020
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