Olam Food Ingredients, the new operating group created after the reorganization within Olam International Limited earlier this year, is expanding its Spices portfolio to meet the rising demand for bold, authentic flavors with the acquisition of one of the world’s leading suppliers of premium green chiles, jalapeños and enchilada sauces.

OIL, through its subsidiary, Olam Americas, Inc. has agreed to acquire the US-based chile pepper business (“CPB”) of major maker of condiments and sauces, Mizkan America, Inc. (“Mizkan”), for $108.5 million. This is the first major acquisition for OFI after the reorganization and is in line with its strategy to provide customers with on-trend food products and sustainable, natural, value-added ingredients and solutions.

Based in Deming, New Mexico, CPB is renowned for its high-quality New Mexico green chiles as well as other specialty chile peppers. These are highly sought after by CPB’s manufacturing, retail, private label and foodservice customers.

Olam Americas, Inc will acquire CPB for a total consideration of $108.5 million, including an estimated net working capital of $55 million, subject to net working capital adjustment at closing.

The consideration was arrived at via a closed bidding process. The acquisition will be funded by a combination of Olam’s internal accruals and existing debt facilities.

The transaction is subject to US antitrust regulatory approval and customary closing conditions which are expected to complete in January 2021.

This acquisition is not expected to have a material impact on the earnings per share or net tangible assets per share of OIL for the financial year ending December 31, 2020 or 2021.

Crowell & Moring LLP provided legal representation to Olam in the transaction. Lazard Middle Market served as exclusive financial advisor to Mizkan on the sale of its chile pepper business, and Locke Lord, LLP served as its legal advisor.