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Bunge to Acquire 70% Stake in Dutch Oils and Fats Supplier IOI Loders Croklaan forĀ USD 946m
Tuesday 12 September 2017

12 September 2017 - US-based agribusiness and food company Bunge Ltd. (NYSE: BG) has entered into a definitive agreement to acquire a 70% ownership interest in Dutch specialty oils and fats supplier IOI Loders Croklaan from IOI Corp. Berhad (KLSE: IOICORP) for USD 946m, the company said on Tuesday.

This will include EUR 297m and USD 595m in cash.

Bunge said the transaction expands its value-added capabilities, reach and scale across core geographies to establish Bunge as a leader in B2B oil solutions.

Following the completion of the transaction, Bunge's enhanced product offering will further support the growth of its customers around the world.

Loders is an established player in the USD 33bn semi-specialty and specialty B2B oils market.

Its portfolio includes the full of palm and tropical oil-derived products with strength in confectionery, bakery and infant nutrition applications.

Loders serves global food industry customers in more than 100 countries around the world and reported fiscal year 2016 revenues of USD 1.6bn.

The transaction combines Bunge's vertically integrated upstream capabilities and existing oils portfolio, predominately based on seed oils, with Loders' high-end specialty and semi-specialty products from tropical oils, including palm, coconut and shea.

It enables Bunge to provide a comprehensive customer offering, from core products to specialties, for B2B customers in the food processing, industrial and artisanal bakery, confectionery, human nutrition and food service segments.

It is expected that Loders will generate USD 105m of EBITDA in 2018 on a stand-alone basis, plus the transaction is expected to result in USD 15m in cost synergies in year one.

In year three, cost synergies are expected to total USD 45m and revenue synergies are expected to be USD 35m for a total of USD 80m annually.

Based on an enterprise value of USD 1.35bn, the EV to 2018 EBITDA multiple is 12.9x, or 7.3x 2018 EBITDA when factoring in run-rate synergies. 

The transaction is expected to be accretive to earnings on a cash basis in the first 12 months post-closing, and by approximately 5% on a GAAP basis and approximately 7% on a cash basis by the end of year three.

The transaction has been unanimously approved by the boards of directors of both Bunge and IOI. The transaction is expected to close in the next 12 months, subject to customary closing conditions, including receipt of required regulatory approvals and the approval of a majority of IOI shareholders.

J.P. Morgan is acting as exclusive financial advisor to Bunge, and Shearman and Sterling is acting as legal counsel.
Details
Date Published: 12/09/2017
Target: IOI Loders Croklaan
Country: Netherlands
Deal Size: 946m (USD)
Sector: Food/Beverages/Tobacco
Type: Corporate acquisition
Financing: Cash
Status: Agreed
Vendor: IOI Corp. Berhad
Buyer: Bunge Ltd
Buyer Advisor: J.P. Morgan , Shearman and Sterling
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