UPDATE 1-Singapore's Olam to buy U.S. spice firm ahead of food ingredients unit IPO

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April 29 (Reuters) - Commodity trader Olam International Ltd said on Thursday its soon-to-be listed food ingredients business will buy U.S. spice company Olde Thompson for an enterprise value of $950 million.

The Singapore-based trader plans to separate and list Olam Food Ingredients (OFI), which includes cocoa, coffee, and edible nuts, by the first half of next year as part of a wider restructuring that would see it split into two new operating businesses.

A decision on where to list the business will likely be made by the summer, Olam International Chief Executive Officer Sunny Verghese had said in February.

Olam's purchase of the 77-year-old U.S. private-label spice supplier from its management shareholders and Kainos Capital is expected to support earnings and margins from its first year in the OFI fold, potentially adding $25 million to $30 million towards core earnings.

"This transaction builds on our long 15-year partnership with Olde Thompson," OFI Chief Executive Officer A. Shekhar said. "Growing our offerings of private label solutions is right at the heart of OFI's strategy."

The deal, he added, would help bridge the gap between OFI's presence in production and supply to dealing with U.S. retail customers. The transaction is expected to close in the second quarter.

Shares of Olam International rose 0.6% in early trade to S$1.75.

Olam International, majority-owned by Singapore state investor Temasek, is one of the biggest traders of agricultural commodities and operates across 60 countries. (Reporting by Nikhil Kurian Nainan in Bengaluru; Editing by Subhranshu Sahu)