Olam Food Ingredients

OLAM CHOOSES LONDON FOR $3BN IPO OF FOODS BUSINESS

According to a statement released by the company, Olam plans to list its food ingredients business, OFI, in London as well as a secondary listing in Singapore concurrently. An initial public offering is also planned for another unit as early as the second half of 2022.

“one of the bigger listings”

Olam’s CEO Sunny Verghese said that he hopes the business will secure a high enough valuation to enter the FTSE 100 – a list of the biggest 100 companies on the exchange, measured by market capitalization.

However, to achieve that, Olam would need to see a significant boost to the share price that would push the valuation above £4bn ($5.5bn) as well as other entry requirements. A full listing in the top 100 would also trigger a number of much stricter rules and corporate governance.

The listing is good news for London’s Financial Markets, which are trying to attract business to the UK after Brexit and following tough competition put up by Amsterdam and Frankfurt to win business away from London

Being a member of the FTSE 100 is not only a feather in any CEO’s cap, but it has practical implications as well. Big investors, such as pension funds, are often required to own FTSE 100 stocks as part of their portfolio, ensuring that OFI will be able to tap into deep funding resources.

Last year, the Singapore-based group announced a major overhaul of operations, which divided its portfolio into two sectors. 

One of them is Olam Food Ingredients, which specializes in cocoa, coffee, edible nuts, spices, and dairy products and caters to the growing need for healthier food.

The primary listing on the LSE will give us access to London’s large and diverse investor base, with its deep and liquid capital markets, and enable us to benefit from its strong understanding of and research coverage across the food and beverage sector. – A. Shekhar, Chief Executive Officer of OFI. 

He continued. “The concurrent listing in Singapore will also enable us to retain our strong local shareholder base and further tap into growing investor appetite in Asia.”

The full press release is below

Singapore, August 13, 2021

Olam International Limited announces Olam Food Ingredients’
intention to seek primary listing on the London Stock Exchange,
with concurrent listing in Singapore

  • Olam Food Ingredients (“OFI”) is on track for an IPO in H1 2022 
  • OFI intends to pursue a primary listing on the premium segment of the London Stock Exchange (“LSE”), and a concurrent listing on the Singapore Exchange (“SGX”) 
  • OFI delivered strong performance in the first six months of 2021, providing good momentum going into 2022  
  • OFI continues to accelerate its growth strategy and completed transformational acquisitions during the period  

London and Singapore, August 13, 2021 – Olam International Limited (“Olam”) today announces that its operating group, OFI, a global leader in natural and sustainable food ingredient solutions, intends to seek a primary listing on the premium segment of the London Stock Exchange. OFI will concurrently seek a listing in Singapore. 

OFI was created in early 2020 following a re-organisation of Olam to unlock and maximise Olam’s long-term value, including an IPO and concurrent demerger by the first half of 2022. 

Manufacturers, retailers, and food service outlets, as well as several niche and premium regional players. OFI has established market-leading positions across a range of on-trend, natural and plant-based products, delivering sustainable and innovative solutions to consumers across the world.  

With deep-rooted presence in the countries where the raw materials for its cocoa, coffee, dairy, nuts, and spices ingredients are produced, OFI has built sustainability and traceability into its core business model, enabling better quality and more reliable and transparent supply. OFI has a unique global scale and presence across the value chain to deliver 

delicious and nutritious food ingredients and solutions in an environmentally sustainable way. 

In 2020, OFI generated annual revenues of US$9.1 billion (S$12.5 billion) and EBIT of US$0.6 billion (S$0.8 billion). Olam’s 2021 Interim Results announced today demonstrate the strong and resilient performance for OFI in the first six months of the year, providing it with good momentum going into 2022. The release can be found in full here.  

A. Shekhar, Chief Executive Officer of OFI commented: 

“The decision to pursue a stock market listing is a major milestone for OFI and we are looking forward to presenting this exciting opportunity to investors globally through a proposed primary listing in London and a concurrent secondary listing in Singapore. The primary listing on the LSE will give us access to London’s large and diverse investor base, with its deep and liquid capital markets, and enable us to benefit from its strong understanding of and research coverage across the food and beverage sector. The concurrent listing in Singapore will also enable us to retain our strong local shareholder base and further tap into growing investor appetite in Asia. 

Olam International Limited announces Olam Food Ingredients’ intention to seek primary listing on the London Stock Exchange, with concurrent listing in Singapore.

“The results reported today show that OFI is a strong business uniquely positioned to take  advantage of long-term consumer trends within the food and beverage industry. Our integrated global network, servicing large, attractive and growing end-use categories within an expanding on-trend ingredients portfolio, makes us a compelling investment for anyone looking to tap into growing global demand for food that is healthier, traceable and sustainable.”

Author

  • Nick 2017 500X500 1

    organisation:

    Nick Baskett is the editor in Chief at Bartalks. He holds a diploma from the Financial Times as a Non Executive Director and works as a consultant across multiple industries. Nick has owned multiple businesses, including an award-winning restaurant and coffee shop in North Macedonia.

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