Tate & Lyle Announces Acquisition of Food Ingredient Companies
Monday December 5, 8:50 am ET
LONDON--(BUSINESS WIRE)--Dec. 5, 2005--Tate & Lyle, the global renewable ingredients company, today announced the signing of agreements to acquire US specialty food ingredients company Continental Custom Ingredients ("CCI") and the Italian based Cesalpinia group of companies ("Cesalpinia Foods") (together "the businesses"). The transactions are expected to be completed by the first quarter of the 2006 calendar year for a total consideration of GBP 74 million.
CCI is Employee owned and was founded in 1975. Its headquarters and primary operations are located in Sycamore, Illinois and it also has operations in Mexico and Canada. CCI is a recognised leader in dairy stabilisers and emulsifier systems and works closely with customers to develop ingredient systems for the North American market. CCI also has expertise in beverage flavours and vitamin and mineral fortification. The consideration payable on closing will be GBP 40 million, made up of cash of GBP 36 million plus assumption of CCI net long term debt estimated at GBP 4 million. The total consideration equates to approximately 1.2 times CCI turnover for the financial year to 31 December 2004. CCI will be reported as part of Tate & Lyle Food & Industrial Ingredients, Americas. The acquisition is expected to cover Tate & Lyle's cost of capital in the first full year of operation.
Cesalpinia Foods is owned by Italian company MARE Group. It was established in the 1960's as a producer of natural flavours and later diversified into manufacturing and marketing natural gums and stabilisers. It operates predominantly from Italy, with production sites in Sicily and Milan. The acquisition expands Tate & Lyle's knowledge of stabilising systems and gums and further enhances its expertise in providing solutions for key target markets such as dairy, soups, sauces and dressings. The debt free consideration, payable in cash on closing, will be GBP 34 million and equates to approximately 1.4 times Cesalpinia Foods turnover for the financial year to 31 December 2004. Cesalpinia Foods will be reported as part of Tate & Lyle Food & Industrial Ingredients, Europe. The acquisition is expected to cover Tate & Lyle's cost of capital in the second full year of operation.
"These bolt-on acquisitions are an excellent fit with Tate & Lyle's stated growth strategy" said Iain Ferguson, Tate & Lyle's Chief Executive. "They represent a further step in broadening our product mix, technology and customer base in rapidly expanding areas such as blends and fortification. Both businesses have been customers of ours for a number of years and we are pleased to welcome them to our team.
"These businesses bring expertise in dairy, gums and custom formulation and will complement Tate & Lyle's broad product range, operational scale and sophisticated research capabilities. Together we will be more responsive in developing distinctive and innovative solutions for the food industry as part of our value added growth strategy."
About Tate & Lyle:
Tate & Lyle is a world leading manufacturer of renewable food and industrial ingredients.
It uses innovative technology to transform corn, wheat and sugar into value-added ingredients for customers in the food, beverage, pharmaceutical, cosmetic, paper, packaging and building industries. The Company is a leader in cereal sweeteners and starches, sugar refining, value added food and industrial ingredients, and citric acid. Tate & Lyle is the world number-one in industrial starches and is the sole manufacturer of SPLENDA® Sucralose.
Headquartered in London, Tate & Lyle is listed on the London Stock Exchange under the symbol TATE.L. In the US its ADRs trade under TATYY. The Company operates more than 60 production facilities in 28 countries, throughout Europe, the Americas and South East Asia. It employs 6,700 people in its subsidiaries with a further 4,500 employed in joint ventures. Sales in the year to 31 March 2005 totalled GBP 3.3 billion. Additional information can be found on www.tateandlyle.com.
SPLENDA® and the SPLENDA® logo are trademarks of McNeil Nutritionals, LLC
Contact:
Tate & Lyle PLC
Mark Robinson, 011-44-20-7626-6525
mark.robinson@tateandlyle.com
or
Taylor Rafferty
Jeff Zelkowitz, 212-889-4350
tateandlyle@taylor-rafferty.com
Source: Tate & Lyle PLC
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