Olam International, through its wholly owned subsidiary Olam West Coast, has agreed to sell the real estate assets of its onion and garlic processing facility in Gilroy, California, for $110.3 million.
The assets will be bought by Chicago-based investment management firm Mesirow Financial.
Olam 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.
“We are pleased to have secured a long-term tiered revenue-sharing agreement with Mesirow Financial for operating the onion and garlic assets for our US spices business,” said Olam’s managing director and CEO of spices, Greg Estep.
“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.”
Garry Cohen, senior managing director of Mesirow Financial’s Sale-Leaseback Capital Division, said: “We are very excited about the prospect of closing this transformative acquisition with Olam.”
He added: “Due to the incredible degree of cooperation between both sides to get to this point, we expect this to be the first of many transactions together forming a terrific long-term relationship.”
The deal is expected to be completed in December 2019.
In addition to this transaction, Olam said it is currently engaged in discussions for divesting and/or restructuring various assets and businesses in line with its strategic plan, some of which may be concluded in this financial year.
Last month, Olam agreed to acquire Californian almond processor and ingredient manufacturer Hughson Nut for $54 million.
© FoodBev Media Ltd 2019