Cobram Estate Olives (CBO) has formally claimed a purchase price adjustment of up to US$31.9 million on its California Olive Ranch (COR) acquisition and expects to pay no earn-out on the deal, as the Australian producer works through the completion of its largest ever transaction.
CBO said it had claimed the adjustment “as part of the COR acquisition completion process and consistent with the purchase agreement”. If determined in CBO’s favour, it would cut the price paid by up to US$31.9 million. The sellers have disputed the claim in full, and the matter is now in a legal process. CBO said the outcome remains uncertain and that, without a negotiated resolution, “it may be some time before the final position is known”.
CBO completed the $250 million (US$174 million) acquisition of COR from investment firm Solum Partners earlier this year, funding the deal through a mix of cash, vendor notes and an earn-out. The transaction made CBO a leading player in the US olive oil market, where California Olive Ranch is the leading Californian-produced extra virgin olive oil in supermarkets.
On the earn-out, the company said the COR sellers were eligible for a payment of up to US$15 million if the business achieved EBITDA of at least US$7.125 million for the six months to 30 June 2026. Based on unaudited management accounts, CBO said it had become evident COR is unlikely to reach that base threshold, meaning no earn-out payment is likely to be payable. The final position will be confirmed through the audit process and reported with the company’s FY2026 results.
Integration on track
Despite the dispute, CBO said the COR integration is progressing in line with expectations, with consolidation of its US business units complete. The company expects initial annualised synergies of about US$12 million, most of which have already been implemented, with the balance to be realised predominantly by the end of FY2027. It expects synergies to reach US$20 million by FY2030, driven by improved olive oil yields, lower grove costs, corporate efficiencies and other operational gains.
The CBO board travelled to California last week for its annual US business strategy session. The company said it remains focused on maximising yields from its own groves and partnering with existing and new third-party Californian growers to lift supply over time.
Lower Australian harvest as expected
CBO expects to complete its 2026 Australian harvest in the coming days, milling more than 74,300 tonnes of olives, down from 80,000 tonnes in 2025, to produce about 11.3 million litres of olive oil, compared with 14.2 million litres a year earlier. Production from the company’s own groves is expected to be 10.6 million litres, down from 13.2 million litres.
The lower volume was expected. The company said 2026 was an “off-year” across most of its Australian groves, reflecting the natural biennial cycle of olive production. Total production from CBO’s own groves and third-party fruit it processed and marketed was 11.9 per cent higher than the previous off-year harvest in 2024. While the total crop by fruit weight was only 7.1 per cent below last year, oil content ran 13.9 per cent under the long-term average, a figure the company said is largely set by seasonal conditions and can swing up to 15 per cent either side of the average.
Contract processing of third-party fruit added 0.7 million litres, and supply agreements and spot purchases from other Australian millers a further 0.8 million litres, taking total olive oil available from the 2026 Australian harvest to 12.1 million litres. CBO said quality was consistent with expectations and that it would have sufficient supply to meet its packaged goods sales plan through to the 2027 harvest.
The 2027 Australian harvest is expected to be an “on-year”. With trees in good condition and a maturing grove age profile, CBO anticipates the 2027 crop will be substantially higher than 2026 and above the previous on-year in 2025. The company reiterated that the two-year rolling average production from its Australian owned groves is expected to exceed 20 million litres once currently planted trees reach full maturity.
On costs, CBO flagged that Australian water prices remain well above long-term averages. It noted the Bureau of Meteorology has confirmed an El Niño phase, which typically raises the likelihood of drier winter and spring conditions across parts of southern and eastern Australia and could push water costs higher through the next growing season.
CBO, led by joint-CEOs and executive directors Leandro Ravetti and Sam Beaton, will release its audited FY2026 full-year results on Friday 28 August.
