SINGAPORE — Olam Americas, Inc., a subsidiary of Olam International Ltd., has agreed to acquire the US-based chile pepper business (CPB) of Mizkan America, Inc. for $108.5 million. Based in Deming, NM, Mizkan’s chile pepper business includes New Mexico green chiles as well as other specialty chile peppers that are sold to manufacturing, retail, private label and foodservice customers.
The transaction marks the first major acquisition for Olam Food Ingredients, which is the new operating group created earlier this year after the reorganization within Olam International Ltd. Olam said the acquisition is in line with its strategy to provide customers with on-trend food products and sustainable, natural, value-added ingredients and solutions.
“Formerly known as Border Foods, CPB has been the leading chile pepper business in the US for nearly 50 years,” said Greg Estep, chief executive officer of Olam Spices. “Combining CPB’s specialty and green chile range with our red chile portfolio (which includes paprika, chile powder and chile pepper) means we can deliver a wider range of ingredient solutions for customers looking to satisfy the rising demand for authentic Mexican flavors — already the third most popular cuisine in the country.
“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 chile sourcing network — notably in Hatch Valley, NM.”
Olam Spices is a major supplier of dried garlic, onion and chile-based ingredients and a global leader for pepper, tropical spices, purées and parsley. The company operates a facility in Las Cruces, NM, and is the largest organic chile grower and processor in the United States.
Olam Spices is one of Olam International’s five food ingredient businesses (Cocoa, Coffee, Nuts and Dairy) that now operate under the Olam Food Ingredients banner.
“This is a fitting first acquisition for OFI, as CPB fulfils OFI’s vision to help its customers meet consumer preferences for health, nutrition, natural and authentic ethnic flavors, as well as their increasing demands for understanding the provenance and environmental impact of their food choices,” said Anantharaman Shekhar, CEO of Olam Food Ingredients. “CPB’s chile 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 addition of CPB’s range of premium green chiles will also broaden and strengthen OFI’s portfolio in plant-based solutions, which continue to gain popularity among consumers. For example, working with OFI’s innovation team we can produce a nut-based cheese that has a jalapeño flavor kick.”
Olam said the transaction is not expected to have a material impact on the company’s earnings per share or net tangible assets per share for the financial years ending Dec. 31, 2020, or Dec. 31, 2021.