Tate & Lyle PLC on Thursday announced a deal to acquire nature-based ingredients company CP Kelco US Inc.
The London-based sweetener and food ingredients supplier said the $1.8 billion takeover of the Atlanta, Georgia-based company will create a ‘leading global speciality food and beverage solutions business’.
Tate & Lyle expects the takeover to complete in the fourth quarter of 2024.
The deal with JM Huber Corp consists of a $1.15 billion cash portion, funded from new and existing debt facilities and cash resources, and $645 million from the issue of 75 million new Tate & Lyle shares, giving a value of $8.60 per Tate & Lyle share.
Tate & Lyle shares were down 2.4% to 661.00 pence each on Thursday morning in London. The wider FTSE 250 index was up 0.3%.
There is a deferred consideration of up to 10 million extra Tate & Lyle shares subject to performance criteria based on Tate & Lyle’s share price.
Consumer and industrial products firm Huber will ‘become a long-term shareholder’ of Tate & Lyle, with a 16% stake on completion of the acquisition of CP Kelco.
Huber will be entitled to nominate two non-executive directors of Tate & Lyle for as long as it holds at least a 15% stake.
Tate & Lyle Chief Executive Officer Nick Hampton 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.’
CP Kelco President Didier Viala said: ‘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.’
In addition, Tate & Lyle announced it will launch a share buyback programme of up to £215 million on Thursday, returning proceeds from the sale of a 49.7% remaining interest in Primient as previously earmarked. The buyback will run until March 31 next year or earlier.
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