Olam expands almonds capacity with Hughson Nut acquisition
23 Oct 2019 --- Olam International Ltd has signed a purchase agreement to acquire a 100 percent interest in Californian almond processor and ingredient manufacturer Hughson Nut Inc (HNI) and associated real estate assets from APB Partners, LLC (APB), at a total enterprise value of US$54 million. With orchards in California and Australia, Olam is one of the world’s largest growers of almonds. The acquisition of HNI is part of its strategy to offer differentiated solutions and target high-growth segments such as nuts.
Speaking with FoodIngredientsFirst, Ashok Krishen, Managing Director and CEO of Edible Nuts at Olam, explains how nuts continue to grow in popularity among consumers who are increasingly looking for nutritious, convenient, plant-based protein snacks. “Almond nuts and flour are proving particularly popular as they can be used in bakery, snacks, cereals as well as gluten-free products,” he says.
“We believe HNI is a good partnership for our existing business – HNI has built a strong customer base in the US and internationally, and combined with our own business, we will be well-positioned to capitalize on this rising demand for almonds and nuts in snacks and food ingredients.”
“This investment is in line with our ambition to become a fully integrated player. Our 4,000 hectares of almond orchards in California and 19,000 hectares in Australia means we can already deliver year-round fresh volumes of high-quality almonds for our customers worldwide, and the addition of HNI will allow us to offer customers a broader range of products to meet their needs – from processed whole nuts and sliced and diced nuts, to almond flour,” Krishen continues.
The extensive processing capabilities of HNI will enable Olam to offer a fully integrated solution across the almond value chain from the US, including processed whole nuts and value-added ingredients, complementing similar capabilities in Australia and Vietnam.
Besides its two primary processing facilities, HNI also manufactures almond ingredients in its newly commissioned ingredients processing plant, which also houses steam sterilization and pasteurization facilities.
Backed by three almond grower-family shareholders of APB, HNI has built a strong customer franchise in the US and a growing customer base in the EU, Japan and Korea, which include branded food manufacturers, retailers and exporters.
The acquisition comes at a time of high growth within the healthy snacking segment. This includes the “hero ingredient” almonds which, in September were crowned the most popular nut in new product introductions across Europe for the fourth consecutive year. https://www.foodingredientsfirst.com/news/Hero-ingredient-Almonds-crowned-most-popular-nut-in-Europe.html
According to Innova Market Insights, there were over 4,500 new product introductions with almonds in Europe in 2018, representing 45 percent of all new product introductions with almonds globally. The Almond Board of California (ABC) says that this popularity is due to almonds’ versatility and ability to tap into trends including clean label and plant-based foods.
Combining HNI’s processing capabilities with Olam’s global network and Edible Nuts expertise will allow the company to keep pace with the growing demand in and outside the US.
Olam is one of the leading providers of edible nuts with a global network of procurement, processing and distribution operations across a portfolio which includes almonds, cashew, hazelnuts, peanuts, pistachios, walnuts, sesame, quinoa and chia.
Following Olam’s acquisition, HNI’s senior executive team and its 400 employees will continue to manage the existing operations and grow the ingredients business.
The grower-family vendors will also continue to supply HNI with almonds for processing.
The acquisition will be funded by a combination of internal accruals and existing debt facilities. The transaction is expected to be completed in November, subject to customary closing conditions.
It is also expected to be earnings and returns accretive from the first year after consolidation. The price consideration was arrived at on a willing buyer, willing-seller basis.
By Gaynor Selby
