Tuesday, July 23, 2024

Tate & Lyle to create global speciality food and beverage solutions business with CP Kelco acquisition

Tate & Lyle has entered into an agreement to acquire CP Kelco (CP Kelco U.S.; CP Kelco China; CP Kelco ApS together with each of their respective subsidiaries), a provider of pectin, speciality gums and other nature-based ingredients, from J.M. Huber Corporation for a total implied consideration of $1.8bn.

Over the last six years, Tate & Lyle has been executing a major strategic transformation to become a growth-focused speciality food and beverage solutions business aligned to attractive structural and growing consumer trends for healthier, tastier and more sustainable food and drink.

This transformation has included a much sharper focus on customers and key categories, increased investment in innovation and solution selling capabilities, and the significant strengthening of its Sweetening, Mouthfeel and Fortification platforms through new product development and acquisitions.

This transformation was completed with the announcement in May of the proposed sale of Tate & Lyle’s remaining interest in Primary Products Investments LLC (Primient).

The proposed transaction significantly accelerates Tate & Lyle’s strategy to be “a leading and differentiated speciality food and beverage solutions business, and to become the solutions partner of choice for customers.”

It is expected to drive stronger revenue growth and significant adjusted EBITDA margin improvement over the next few years.

Nick Hampton, Chief Executive, Tate & Lyle, said: “A combination with CP Kelco is the perfect fit with Tate & Lyle’s growth-focused strategy and purpose. It significantly strengthens our Sweetening, Mouthfeel and Fortification platforms, enhances our solutions capabilities across our four core categories, and unlocks new growth opportunities.  Together, we will have a compelling customer proposition.

“With our leading portfolio of speciality ingredients and a world-class team of food science experts, we will be uniquely placed to provide our customers with the solutions they need to meet growing consumer demand for healthier, tastier and more sustainable food and drink.

“We’ve been collaborating with CP Kelco on innovation projects for many years and are very aware of their excellent products and the outstanding capabilities of their people. We are excited about the opportunities the combination will create for customers across the world, and the opportunities for employees in both companies to develop their careers across a broader global business.

“Following on from the announcement of the proposed sale of our remaining interest in Primient last month, the proposed combination with CP Kelco represents a significant acceleration of our growth-focused strategy. It creates a leading, global speciality food and beverage solutions business, ideally placed to benefit from the structural trends towards more plant-based, clean-label and sustainable ingredients and solutions.

“The growth potential of the proposed combined business is significant and we look forward to the future with confidence and excitement.”

David Hearn, Chair, Tate & Lyle, said: “Today’s announcement represents a major acceleration in the delivery of Tate & Lyle’s growth-focused strategy and the Board is very excited about the opportunities ahead. Our strong management team has all the right capabilities to drive significant value from this transaction for the benefit of our shareholders, customers and employees.

“We are delighted that, looking ahead, Huber will become a new long-term shareholder in Tate & Lyle. We look forward to welcoming their two new non-executive directors to our Board, and to working with them, and our other shareholders, to progress the enlarged company’s growth strategy.”

Didier Viala, President, CP Kelco, said: “We are delighted to be joining with Tate & Lyle to create a leading and differentiated speciality food and beverage solutions business. CP Kelco and Tate & Lyle are both highly customer-focused businesses with a shared passion for science and innovation.

“With our complementary portfolio and deep technical expertise, we will bring new value to our customers and new opportunities for our employees. This is an exciting time for our combined businesses.”

Gretchen W. McClain, President & CEO, J.M. Huber Corporation, said: “Together, Huber and Tate & Lyle are taking a bold and strategic move by creating a combined entity well-positioned with scale to be the driving force behind the future of food and wellness.

“Huber has been an excellent steward of CP Kelco for the past 20 years with a relentless pursuit to growing and creating value as a leading provider of nature-based, specialty ingredient solutions. This step unlocks the full value of CP Kelco and our long-term partnership as a shareholder in Tate & Lyle signifies Huber’s long-term desire to remain engaged in the attractive food and beverage market.

“Our collective rich histories and depth of experience combined with our shared purpose, values and commitment to our customers, employees, and communities will enhance future value for all stakeholders.”

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