Global food and beverage solutions company, Tate & Lyle, has acquired nature-based ingredients company CP Kelco for US$1.8 billion on a cash-free, debt-free basis. Tate & Lyle said the deal will “significantly accelerate” its growth plans.
CP Kelco’s parent company, J.M. Huber Corporation, will have a 16 per cent interest in the new company and two seats on its board.
CP Kelco president, Didier Viala, said combining CP Kelco’s nature-based, specialty ingredient solutions for stabilisation and texture with Tate & Lyle’s sweetening, mouthfeel and fortification platforms would enhance both companies’ capabilities across multiple product categories and opportunities for growth.
“For more than 90 years, CP Kelco has served as an innovation partner for companies of all sizes and in more than 100 countries, leveraging our multi-functional, nature-based ingredients across a variety of product formulation challenges and opportunities.
“By joining forces with Tate & Lyle, we can create an ingredient innovation powerhouse – one that’s truly committed to meeting consumer and market needs with a unique portfolio of sustainable solutions and our deep technical and applications expertise,” Viala said.
Tate & Lyle CEO, Nick Hampton, said the new company would be 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.
“The growth potential of the proposed combined business is significant, and we look forward to the future with confidence and excitement,” Hampton said.
Tate & Lyle has been undergoing a strategic transformation for the last six years, to align with growing consumer trends for healthier, tastier, and more sustainable food and drinks.
“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,” the company said.
It is expected to drive stronger revenue growth and “significant” adjusted EBITDA margin improvement over the next few years. It is also expected to be accretive to adjusted earnings per share, including cost synergies only, in the second full financial year following completion, and strongly accretive thereafter.
The acquisition is expected to be finalised in the fourth quarter of CY24.
