Tate & Lyle has entered into an agreement to sell a controlling stake in a new company and its subsidiaries, NewCo, comprising its primary products business in North America and Latin America and its interests in the Almidones Mexicanos S.A de C.V and DuPont Tate & Lyle Bio-Products Co., LLC joint ventures, to KPS Capital Partners, LP.
Tate & Lyle and KPS will each own 50% of NewCo with KPS having board and operational control.
This transformational move repositions Tate & Lyle as a global food and beverage solutions business focused on faster growing specialty markets, with opportunity to benefit from growing global consumer demand for healthier food and drink, accelerated by the global pandemic.
It will also build on FBS’ strong track record of growth over the last three years through a step-up in R&D investment to accelerate innovation and increase focus on solutions development to support and strengthen customer relationships.
"This announcement represents the next phase in the evolution of Tate & Lyle," says Nick Hampton, CEO, Tate & Lyle. "Our one strong company will become two stronger businesses, both in a position to pursue new and exciting growth opportunities in their respective markets.
"Building on the strong platform established over the last three years, the proposed transaction will transform Tate & Lyle into a purpose-led, global food and beverage solutions business, serving faster growing speciality markets," he continues. "With our new focus and a step-up in R&D investment, innovation and solutions development, we will be able to significantly enhance how we serve our customers, and accelerate growth.
"Our deep scientific expertise, unique product portfolio and leading technical capabilities in sweetening, mouthfeel and fortification, position us very well to benefit from growing consumer demand for food and drink that is lower in sugar, calories and fat, and with added fiber. With the pandemic accelerating the trend toward healthier food, now is the right time to focus our business on capturing this growth."
NewCo will comprise Tate & Lyle’s primary products business in North America and Latin America consisting of the following operations:
- Corn wet mills in the U.S. in Decatur, IL, Lafayette, IN, and Loudon, TN
- Acidulants plants in Dayton, OH, Duluth, MN and Santa Rosa, Brazil
- 50% shareholdings in two joint ventures – Almex in Guadalajara, Mexico, and Bio-PDO, in Loudon, TN
- Grain elevator network and bulk transfer stations in North America
Primary Products’ European operations, which in aggregate represented approximately 5% of primary products revenue are not included in NewCo and will remain with Tate & Lyle.
About Tate & Lyle
Through scientific and technical expertise, large-scale manufacturing operations and talented people, Tate & Lyle create ingredients and solutions for customers which are used in products enjoyed by millions of people every day around the world. The company uses innovative technology to turn raw materials like corn, tapioca, and stevia leaves into ingredients and solutions that add taste, texture, nutrients and increased functionality to food, beverages, industrial products, personal care products and animal feed.
