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Olam Acquires Onion Processor Dehydro Foods for $30.8 Million

Nov. 30 (Bloomberg) -- Olam International Ltd., the commodity trader fighting allegations it may collapse, acquired a processor of dehydrated onions and herbs in Egypt for $30.8 million.

The cost to buy Dehydro Foods Ltd. includes an estimated $3.5 million for net working capital, Singapore-based Olam said in a stock exchange statement today. The investment is expected to deliver a 28 percent margin in Ebitda, it said.

“The consideration was arrived on a negotiated basis taking into account the historical performance and the prospects of the business,” Olam said in the statement. “The consideration shall be discharged on a cash basis from internal accruals and shall be paid at completion.”

The transaction is part of Olam’s “strategic thrust” to become the leading supply chain partner to its major global customers, the company said in the statement. The investment is expected to be immediately earnings accretive to Olam, according to the statement.

Olam, the world’s second-largest rice trader, is suing Muddy Waters and the researcher’s founder Carson Block for defamation following comments initially made by Block on Nov. 19 in London questioning Olam’s accounting methods and debt level.

To contact the reporter on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net

To contact the editor responsible for this story: Anand Krishnamoorthy at anandk@bloomberg.net

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