Olam to acquire Gilroy Foods & Flavors unit
June 8, 2010
by Eric Schroeder
SINGAPORE — Olam International has reached agreement to acquire the Gilroy Foods & Flavors dehydrated and vegetable product operations of Omaha-based ConAgra Foods, Inc. for $250 million. The transaction will include substantially all of the assets of Gilroy Foods & Flavors’ dehydrated garlic, onion, capsicum and Controlled Moisture, GardenFrost, Redi-Made and fresh vegetable operations, all of which are part of ConAgra’s Commercial Foods segment.
“This announcement is part of ConAgra Foods’ ongoing strategy of divesting non-core operations to continuously improve our focus,” said Gary Rodkin, chief executive officer of ConAgra Foods. “As our past portfolio changes have demonstrated, transactions like these, along with our capital allocation discipline, have allowed us to concentrate our resources behind the highest opportunity areas of our company. Olam’s global leadership in food ingredients will provide the Gilroy Foods & Flavors dehydrated and vegetable products business more attention and resources for growth.”
Shekhar Anantharaman, executive director of Olam, added, “This transaction is a good example of our focused corporate strategy to build leadership in selective value chain adjacencies through investments in upstream and midstream assets. Apart from helping us build an integrated leadership position in the Spices & Dehydrates portfolio, it will also help us raise our overall portfolio margins.”
In line with the transaction, ConAgra said it will transfer to Olan ownership of six manufacturing facilities located in Gilroy, Hanford and Modesto, Calif.; Fernley, Nev.; Las Cruces, N.M.; and Umatilla, Ore., as well as a warehouse in King City, Calif.
ConAgra said its Carol Stream, Ill., Cranbury, N.J., and Hyrum, Utah, facilities, which produce seasoning blends and flavors, are not included in the transaction.
From a personnel perspective, Greg Estep, formerly president of Gilroy Foods & Flavors dehydrated and vegetable product operations, has been named president of spices and dehydrates for Olam International. Paul Maass, president of ConAgra Mills, is expected to assume the additional responsibility of leading the remaining seasonal blends and flavors business under the Spicetec Flavors & Seasonings brand name.
Headquartered in Singapore, Olam International is a global integrated supply chain manager and processor of agricultural products and food ingredients, sourcing 20 products with a direct presence in 64 countries.
The company’s business operations include cocoa, coffee, cashew, sesame, rice, cotton and wood products.
Olam said the acquisition is part of the company’s plan to consolidate its Spices & Dehydrates business into a global leadership position. The investment builds upon the company’s earlier acquisitions of assets from U.S. tomato processor SK Foods LP, dehydration facility assets from Firebaugh, Calif.-based De Francesco & Sons and dried garlic producer Key Foods Ingredients.