AAK completes acquisition of CalOils

IN LINE with efforts to increase its foothold in the US vegetables oil markets, AAK has entered into an agreement to acquire the leading vegetable oils company on the US West Coast, California Oils Corporation.

Richmond-based CalOils is AAK’s fourth production site in the United States. It will be consolidated into the Food Ingredients and Chocolate & Confectionery Fats business areas.

CalOils, acquired from Mitsubishi Corporation of Japan, had approximately SEK 1,350 million in revenues and 110,000 MT in volume last year. It has 65 employees.

The transaction, which commenced on 15 July 2016 when AAK entered into an agreement with CalOils, was completed last August 31. Acquisition costs are estimated at SEK 15 million, with the price subject to final calculation of normalised working capital and is expected to be less than 3 percent of AAK’s turnover on a cash and debt-free basis. These will be funded by existing credit facilities and charged to the third quarter of 2016 and.

Integration will begin immediately but the effect on AAK’s operating profit is expected to be felt beginning the third quarter of next year.

AAK USA president Terrence W. Thomas said AAK has been emphasising a strong presence on the US West Coast for several years now.

“The West Coast encompasses 20 percent of the US population and this expansion has been identified as an important component of AAK’s long-term growth strategy. The acquisition of CalOils will transform AAK into a true national speciality and semi-speciality edible oils company, improving our ability to serve existing customers on a national scale while at the same time creating new customer opportunities,” he said.

Mr Thomas noted the important market positions of CalOils in the West Coast, and also said “This acquisition establishes AAK as the leading supplier of speciality and semi-speciality oils to the bakery, dairy and chocolate and confectionery industries in California and across the west coast of the US and Canada. In the medium term, it also supports our US foodservice platform, Oasis Foods, to develop into a national supplier.”