Olam Group Limited · SGX:VC2
Olam — Olam International — Merger or Acquisition (December 2014)
33 slides from Olam's merger presentation, Dec 5, 2014
Slide 1: Acquisition of McCleskey Mills Inc. Analysts/Media Conference Call
Olam International Limited Acquisition of McCleskey Mills Inc. Analysts/Media Conference Call 5 December 2014 I Singapore 1
Slide 2: Cautionary Note on Forward-looking Statements
Cautionary Note on Forward-looking Statements This presentation may contain statements regarding the business of Olam International Limited and its subsidiaries (‘Group’) that are of a forward looking nature and are therefore based on management’s assumptions about future developments. Such forward
Slide 3: Presenters
Presenters • A. Shekhar Executive Director, Finance & Business Development Olam International • Ashok Krishen Managing Director & Global Head, Edible Nuts Olam International • Anupam Jindel President & Global Head, Peanuts Olam International • Joe West Executive Vice President, Operations & Sales Mc
Slide 4: Agenda
Agenda • Transaction Overview • Olam’s Current Participation in Peanuts • US Peanut Industry • Profile of McCleskey Mills Inc. (MMI) • Benefits of Olam-MMI Combination • Financial Impact • Summary 4
Slide 5: Transaction Overview
Transaction Overview Peanut harvesting, Argentina 5
Slide 6: Transaction Overview
Transaction Overview Olam to acquire 100% equity stake in McCleskey Mills Inc. (MMI) from its owners at an Enterprise value of US$176M Located in the Southeast, the peanut heartland of the US, MMI is the 3rd Highlights largest Sheller with a market share of 12%, 2 large shelling facilities and a str
Slide 7: Olam's Current Participation in Peanuts
Olam’s Current Participation in Peanuts Peanut Processing, Ship loading,India South Africa 7
Slide 8: Olam's Global Participation in Peanuts
Olam’s Global Participation in Peanuts Trading/ Origin Farming Shelling Blanching Ingredients Distribution Argentina US India South Africa China (net importer) 8
Slide 9: Olam's Current Participation in US Peanuts
Olam’s Current Participation in US Peanuts 4 peanut blanching and ingredient manufacturing facilities EDENTON, NC DUBLIN, BLAKELY, ATLANTA, TX GA GA SYLVESTER, GA 9
Slide 10: Blanching Plant in Blakely, Georgia
Blanching Plant in Blakely, Georgia Blakely, GA Pre-Cleaning, Re-milling, and Blanching Lines 10
Slide 11: Blanching & Re-milling in Sylvester, Georgia
Blanching & Re-milling in Sylvester, Georgia Sylvester, GA Pre-Cleaning, Re-milling, and Blanching Lines 11
Slide 12: Blanching & Re-milling in Dublin, Texas
Blanching & Re-milling in Dublin, Texas Dublin, TX Pre-Cleaning, Re-milling, and Blanching Lines 12
Slide 13: Roasting & Ingredients in Dublin, Texas
Roasting & Ingredients in Dublin, Texas Dublin, TX Dry Roasting Line 13
Slide 14: Ingredients in Edenton, North Carolina
Ingredients in Edenton, North Carolina Edenton, NC Dry Roasting, Paste/Butter, Variegate, and Granulation Lines 14
Slide 15: US Peanut Industry
US Peanut Industry 15
Slide 16: US Peanuts: Key Growing Areas
US Peanuts: Key Growing Areas • The Southeast, where MMI is located, produces 70% of USA peanuts • Georgia is the largest state producing 45% of USA peanuts, followed by Florida (13%), Alabama (12%) and Texas (10%) Georgia Alabama Florida Texas Source: National Peanut Board, USA 16
Slide 17: US Peanuts: Lowest Cost Producer
US Peanuts: Lowest Cost Producer • Lowest cost producer of peanuts among all key origins: • Advances in seed technology have led to a sharp increase in USA peanut yields in recent past in comparison to other key origins • Current US Medium Runner is priced at US$1,200-1,250/MT CIF Rotterdam. The equ
Slide 18: US Peanuts: Large and Growing Domestic Market
US Peanuts: Large and Growing Domestic Market • US is the largest market for processed peanuts • Global market for processed peanuts is estimated to be 5M MT out of which the US market accounts for ~35-40% of this demand • Strong domestic growth potential • Peanut butter, which is roughly 50-56% of
Slide 19: US Peanuts: Strong Potential for Export Growth
US Peanuts: Strong Potential for Export Growth Exports from Key Origins 2001-2014 1200 1000 800 000 MT ARG 600 CHN USA 400 200 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 • US exports have increased significantly since 2011 and will continue to grow • China is now a large
Slide 20: Profile of McCleskey Mills (MMI)
Profile of McCleskey Mills (MMI) Peanut MMI Headquarters, Operations, India Processing, Smithville, South AfricaGeorgia 20
Slide 21: Profile of MMI
Profile of MMI • MMI is the 3rd largest peanut sheller in the US with a market share of 12% and an annual average production of 250,000 farmer stock tons (FST) • MMI has a strong customer base with years of close association with several leading branded and private label players in the US • Owns she
Slide 22: MMI's Locations in the Southeast
MMI’s Locations in the Southeast MMI SMITHVILLE, MMI DOSTER / GA ROCHELLE, GA 22
Slide 23: MMI's Shelling Facilities
MMI’s Shelling Facilities Below: MMI’s Shelling Plant, Smithville, GA Above: MMI’s Buying Point, Rochelle, GA 23
Slide 24: MMI's Shelling & Warehousing Facilities
MMI’s Shelling & Warehousing Facilities Left: MMI’s Shelling Plant, Rochelle, GA Right: MMI’s Warehouse, Rochelle, GA 24
Slide 25: MMI Senior Management Team
MMI Senior Management Team • Joe West Executive Vice President, Operations & Sales • Chad Chandler Vice President, Procurement • Bill Marshall Vice President, Seed & Projects 25
Slide 26: Benefits of Olam-MMI Combination
Benefits of Olam-MMI Combination Peanut Processing, US 26
Slide 27: Olam-MMI: Fully Integrated Across the US Peanut Value Chain
Olam-MMI: Fully Integrated Across the US Peanut Value Chain • With MMI, Olam will backward integrate into peanut shelling in the US, which has emerged as the most competitive peanut origin • Enables us to become the most vertically integrated supplier in the US peanut industry with strategic assets
Slide 28: Transforms Olam's Market Position Globally
Transforms Olam’s Market Position Globally • Enhances our position with customers by being: • The strategic supplier of choice for Edible Nuts with the most diversified offering in almonds, cashews, hazelnuts and peanuts • The only global player with sourcing and peanut shelling operations in all ke
Slide 29: Financial Impact
Financial Impact Peanut Warehousing, South Africa 29
Slide 30: Financial Impact
Financial Impact • EBITDA/IC at steady state to be within Olam’s target range of 13-16% for midstream processing • Transaction valuation multiple ~ 6X EV/EBITDA (based on normalised average 3-year historical EBITDA) • Acquisition to be funded by a combination of internal accruals and existing debt f
Slide 31: Summary
Summary Peanut Processing Plant, US 31
Slide 32: Summary
Summary • Acquisition of 3rd largest US peanut sheller at Enterprise Value of US$176M is in line with our growth strategy of selectively investing in prioritised platforms • This acquisition enables us to participate in the attractive shelling segment of the US peanut value chain, and become the mos
Slide 33: Thank You
Thank You Peanut Farming, South Africa 33
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