Tate & Lyle completes sale of Primary Products business to KPS Capital Partners

USA – British-headquartered, global supplier of food and beverage ingredients Tate and Lyle has completed the sale of a controlling stake in its Primary Products business to KPS Capital Partners.  

Previously referred to as NewCo, now called “Primient”,  the sold business makes corn-derived sweeteners, industrial starches and acidulants in North America and Brazil   

It also includes Tate and Lyle’s interests in the Almidones Mexicanos S.A de C.V and DuPont Tate & Lyle Bio-Products Company, LLC joint ventures.  

KPS now holds a 50.1% interest in Primient and has Board and operational control while Tate & Lyle maintains a 49.9% interest in the US$1.7 billion business.
  
Nick Hampton, Chief Executive Officer of Tate & Lyle, commented: “The completion of this transaction represents the start of a new and exciting chapter for our business.  

 Tate & Lyle is now transformed into a purpose-led, growth-focused global food and beverage solutions business, serving faster growing speciality markets.” 

With this sale, Tate & Lyle will transform itself from an old-school corn-based products business to a high-tech enterprise with science at its core.  

The business Tate & Lyle is splitting off was founded in 1906 as the A.E. Staley Manufacturing Company, and has a long history of making products in the U.S. and Brazil, according to a KPS press release about the sale. 
  
“Over the last four years we have created a strong platform for growth.  As a more focussed business we will enhance the way we serve our customers and accelerate growth through increased investment in R&D, innovation and solutions development,” Hampton added. 

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 “The trend towards healthier food is accelerating, and with our leading positions in sweetening, mouthfeel and fortification, we are well-positioned to meet growing consumer demand for food and drink that is lower in sugar, calories and fat, and with added fibre.” 
  
While KPS’ current portfolio has no other food companies, this deal makes sense for the private equity firm, which has been known to reinvigorate industrial manufacturing businesses.  

While this division is not struggling or in need of significant investment, an owner who knows manufacturing can help it continue to succeed. 
  
Michael Psaros, Co-Founder and Managing Partner of KPS Capital Partners, said: “KPS is pleased to have acquired a controlling interest in Primient.  

Primient is now poised for success as a leading, independent and focused manufacturer of critical corn-derived ingredients for both food and industrial markets.” 

Following the sale, Tate & Lyle has said it intends to return approximately £500 million to ordinary shareholders by way of a special dividend, with an associated share consolidation. 

“The special dividend and associated share consolidation will be subject to the approval of Tate & Lyle’s shareholders,”  the company said.

If approved by shareholders, the special dividend is expected to be paid in the second quarter of the calendar year. 

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