Olam buying Gilroy Foods & Flavors from ConAgra
June 9, 2010
by Bryan Salvage
OMAHA, NEB. – ConAgra Foods Inc. has reached an agreement to sell its Gilroy Foods & Flavors dehydrated and vegetable product operations to Olam International for $250 million, subject to final working capital adjustments. The seasoning blends and flavors business and supporting plant operations will remain with ConAgra Foods' Commercial Foods reporting segment following the transaction closing.
According to terms of the agreement, ConAgra Foods will sell 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 the Commercial Foods reporting segment. Sales for those operations were approximately $300 million in fiscal 2010.
This transaction is expected to close within 30 to 60 days subject to satisfaction of customary closing conditions, including normal regulatory approvals, with ConAgra Foods continuing to operate the business until that time.
Additional details of the transaction include:
Manufacturing facilities that are expected to transition to Olam's ownership include: Gilroy, Hanford and Modesto, Calif.; Fernley, Nev.; Las Cruces, N.M.; and Umatilla, Ore. A warehouse in King City, Calif., is also included in the sale. Upon the transaction closing, all current employees at these locations will transition to Olam.
Virtually all current employees supporting the dehydrated and vegetable products business located at the Omaha, Neb., headquarters and other satellite locations for Gilroy Foods will transition to Olam.
This agreement does not include the Carol Stream, Ill., Cranbury, N.J., and Hyrum, Utah, facilities, which produce seasoning blends and flavors. ConAgra Foods will maintain full ownership of these plants and continue operations as usual.
Greg Estep, formerly president of this business unit for ConAgra Foods, is expected to become president of spices and dehydrates for Olam International.
Paul Maass, president of ConAgra Mills, will assume the additional responsibility of leading the remaining seasoning blends and flavors business under the Spicetec Flavors & Seasonings brand name.
Olam International is a leading global integrated supply chain manager and processor of agricultural products and food ingredients, sourcing 20 products to more than 10,600 customers in 64 countries.