15 Jul 2024 Mega deals in food ingredients
Yet more multi-billion dollar mergers in the world of food ingredients… Tate & Lyle buys CP Kelco, and Roquette acquires IFF Pharma Solutions….
Tate & Lyle will acquire the hydrocolloid and pectin supplier, CP Kelco, in a deal worth $1.8-billion on a cash-free, debt-free basis.
CP Kelco’s product portfolio is made up of texturising ingredients including citrus fibre, gellan gum, pectin, carrageenan, xanthan gum, diutan gum, fermentation-derived cellulose, refined locust bean gum, and microparticulated whey protein concentrate.
London-headquartered Tate & Lyle said the acquisition was part of its strategic transformation to become a business that was aligned with “attractive structural and growing consumer trends for healthier, tastier and more sustainable food and drink”.
Part of this would be achieved by significantly strengthening its sweetening, mouthfeel and fortification platforms through new product development and acquisitions, it added.
The deal is set to expand Tate & Lyle’s offering in its already large and fast-growing addressable market for specialty food and drink ingredients, worth $19-billion and enjoying a 6% compound annual growth rate (CAGR), it said.
The global ingredient supplier said it expected the acquisition to drive stronger revenue growth and significant adjusted margin improvement for EBITDA (earnings before interest, taxes, depreciation, and amortization) over the next few years.
CP Kelco to become long-term shareholder
Following the sale, the owner of CP Kelco – US-headquartered JM Huber Corporation – will become a long-term shareholder (around 16%) in Tate & Lyle and will be entitled to appoint two non-executive directors to the Tate & Lyle Board.
“The potential for Huber to become a long-term shareholder and participate in the future value creation from the combination of the two businesses was central to unlocking a transaction,” said Tate & Lyle in a statement.
Acquisition is a ‘perfect fit’
Nick Hampton, CEO of Tate & Lyle said the combination with CP Kelco was “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.
Hampton added: “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.”
Didier Viala, president of CP Kelco said the acquisition would 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,” 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.”
Tate & Lyle has its SA operations headquartered in Jo’burg, while CP Kelco is represented locally by Azelis.
Roquette to acquire IFF Pharma Solutions in $2.85bn deal
Roquette’s acquisition of IFF Pharma Solutions, which makes excipients, flavours, and functional ingredients, will strengthen its position in the health and nutrition markets.
On 19 March 2024, Roquette, a plant-based ingredients and pharmaceutical excipients company, announced an acquisition agreement to buy IFF (International Flavors & Fragrances) Pharma Solutions in a deal reported to be worth $2.85-billion.
The acquisition will integrate IFF Pharma Solutions’ capabilities into Roquette’s portfolio, particularly in excipients for oral dosage forms. This alignment will enhance Roquette’s health and nutrition segments and accelerate its growth trajectory, it said.
Erik Fyrwald, CEO of IFF Pharma Solutions, emphasised the two companies’ synergy, saying: “[…] This represents a great opportunity for our team and customers. Roquette is the ideal strategic partner for IFF Pharma Solutions, with whom it has complementary portfolio and innovation capabilities, and with whom it shares a culture of operational excellence.”
IFF Pharma Solutions, headquartered in New York, generated approximately $1-billion in revenue in 2023 and brings a substantial footprint, including ten global R&D and production sites.
The acquisition, expected to close in 2025, will bolster France-based Roquette’s presence in the US and expand the company’s formulation and drug delivery capabilities. According to Roquette’s press release, the acquisition “turns the company into the pharmaceutical industry’s partner of choice for the development of innovative drug delivery solutions to best address current and future customer needs, and to improve patients’ lives”.
Source: Ingredientsnetwork.com, Roquette, Tate & Lyle