Bunge (BG) said Tuesday it has agreed to acquire a 70% ownership interest in IOI Loders Croklaan from IOI Corporation Berhad for $946 million.
Bunge said Loder’s portfolio includes palm and tropical oil-derived products, confectionery, bakery and infant nutrition applications.
The company said the transaction will be immediately accretive to cash earnings, with Loders seen generating $105 million of EBITDA in 2018 on a stand-alone basis, plus the transaction is expected to result in $15 million in cost synergies in year one. In year three, cost synergies are expected to total $45 million and revenue synergies are expected to be $35 million for a total of $80 million annually.
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.
Bunge also said it has entered into a $900 million, unsecured, delayed draw, three-year term loan agreement with Sumitomo Mitsui Banking Corporation, which may be used to finance the acquisition.