Olam International Acquires Soluble Coffee Assets And Businesses Of Seda Solubles for US$52m

The key assets acquired consist of a manufacturing facility and a packaging facility in Spain, a storage and packaging facility in Russia and Seda’s brands. The acquisition of CBU is in line with the growth strategy of Olam’s Coffee business.

3 Jan 2013 --- Olam International Limited has acquired the soluble coffee assets and business (“Coffee Business Unit” or “CBU”) of Seda Solubles (“Seda”) for US$52 million through a bidding process under a court-managed scheme of receivership in Spain. The consideration shall be discharged on a cash basis from internal accruals.
 
Seda is a leading producer of soluble coffee and coffee related products with a fully integrated production platform.
 
The key assets acquired consist of a manufacturing facility and a packaging facility in Spain, a storage and packaging facility in Russia and Seda’s brands.  The acquisition of CBU is in line with the growth strategy of Olam’s Coffee business.
 
Olam’s Senior Vice President, Coffee, Arun Sharma said: “Despite the financial situation surrounding Seda at the corporate level, the business has managed to retain its customer and operating franchise.”
 
Olam plans to commit a further US$7 million in capital expenditure over the next two years for asset overhaul and maintenance.
 
The business is expected to deliver an EBITDA margin of 20% and an Equity IRR of 30%.