Cobram Estate Secures $175M Placement to Expand US Olive Oil Production Ninefold
Cobram Estate Olives has secured $175 million through an institutional placement to accelerate its expansion in the US, aiming to increase its Californian olive groves to 3,600 hectares and boost olive oil production significantly by 2027.
- Completed $175 million institutional placement at $3.20 per share
- Plans to develop 1,600 hectares of new olive groves in California by end of 2027
- Total Californian plantings to reach approximately 3,600 hectares
- Expected increase in Californian olive oil production from 0.5 million to over 9 million litres annually
- Non-underwritten Share Purchase Plan launched to raise up to $10 million
Strategic Capital Raise to Fuel US Growth
Cobram Estate Olives Limited (ASX, CBO), Australia's leading vertically integrated olive oil producer, has successfully completed a $175 million institutional placement priced at $3.20 per share. This capital injection is earmarked to fast-track the company’s ambitious growth strategy in the United States, particularly in California, where it plans to significantly expand its olive grove footprint.
Expanding Californian Olive Groves
The funds will enable Cobram Estate to acquire additional freehold farmland and develop approximately 1,600 hectares of new olive groves by the end of calendar year 2027. This expansion will bring the company’s total Californian plantings to around 3,600 hectares, a substantial increase from the current 1,025 hectares. At full maturity, these groves are projected to produce over 9 million litres of olive oil annually, a dramatic rise from the current two-year average of 0.5 million litres.
Tapping into the US Olive Oil Market
The US market represents a significant opportunity for Cobram Estate. Olive oil sales in American supermarkets reached US$2.8 billion (approximately A$4.3 billion) in FY2025, dwarfing the Australian supermarket market at A$0.6 billion. The company aims to leverage its increased Californian production capacity to grow packaged goods sales in the US, where demand for locally produced olive oil is rising.
Leadership and Funding Structure
To oversee this expansion, Joint-CEO Leandro Ravetti has relocated to the US to lead land acquisitions and grove development. The equity raise, combined with operating cash flows and potential debt facilities, is expected to fully fund the current US expansion plans. Additionally, Cobram Estate has launched a non-underwritten Share Purchase Plan (SPP) to raise up to $10 million from existing shareholders, offering them an opportunity to participate in the company’s growth.
Director Sell-Down and Shareholder Confidence
Concurrent with the placement, the company’s joint-CEOs, Sam Beaton and Leandro Ravetti, sold a combined 2 million shares to repay company loans. Despite this sell-down, both executives remain significant shareholders and committed to Cobram Estate’s long-term success. The strong demand for the placement, exceeding the targeted raise, reflects robust investor confidence in the company’s US growth trajectory.
Bottom Line?
Cobram Estate’s bold US expansion signals a transformative phase, with production capacity and market presence set to surge by 2027.
Questions in the middle?
- Which specific Californian properties are targeted for acquisition, and what are the timelines for finalising these deals?
- How will the increased production capacity impact Cobram Estate’s margins and profitability in the US market?
- What are the potential risks related to agricultural development and market competition in California?
