USA – KPS Capital Partners has entered into a definitive purchase agreement to acquire Tate & Lyle’s remaining 49.7% ownership interest in Primient for US$350 million.
This acquisition solidifies KPS’s control over Primient, a key player in producing food and industrial ingredients from plant-based, renewable resources.
Primient, with over a century of experience, specializes in corn-derived products used in various applications, including carbonated beverages, confectionery, packaging, and animal feed.
The company employs approximately 1,800 people across its six manufacturing facilities in the United States and Brazil.
KPS initially acquired a controlling interest in Primient, Tate & Lyle’s Primary Products business in North America and Latin America, in April 2022.
Concurrently, long-term agreements were established between Primient and Tate & Lyle to ensure the security of supply for both companies’ retained businesses.
“Under our ownership, Primient will continue modernizing its operations, supporting growth initiatives and industry-leading sustainability practices. We intend to make further strategic investments to strengthen Primient’s role within the corn wet milling industry and the broader bioeconomy,” Michael Psaros, co-founder and co-managing partner at KPS, remarked.
Primient’s CEO, Jim Stutelberg, highlighted the company’s ambitious investment plans, saying, that strong KPS support, th company is executing on more than US$700 million in capital investments over the next five years to ensure the highest quality and most reliable production in the industry for decades to come.
The transaction, expected to be completed by the end of July 2024, is subject to customary closing conditions and approvals. KPS plans to finance the investment through a combination of debt and equity.
KPS, managing approximately US$21.4 billion of assets as of December 31, 2023, is committed to funding the investment in Primient through a mix of equity and debt.
The expected net cash proceeds for Tate & Lyle, post-tax and transaction costs, are about £215 million (US$270 million). The company plans to return this net cash to shareholders through an on-market share buyback program.
Tate & Lyle’s specialty focus
Tate & Lyle’s sale of its stake in Primient marks a significant step in its transformation into a specialized food and beverage solutions business.
CEO Nick Hampton commented, “With this sale, the transformation of Tate & Lyle into a fully focused specialty food and beverage solutions business is complete. We are now well-positioned to capture the significant growth opportunities ahead as we look to provide our customers with the solutions they need to meet growing consumer demand for healthier, tastier, and more sustainable food and drink.”
Following the sale, Tate & Lyle will continue to focus on its global leadership in sweetening, mouthfeel, and fortification benefits for food and beverages.
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