LONDON: Tate & Lyle PLC has announced the sale of its remaining 49.7% interest in Primient to KPS Capital Partners, LP, marking the completion of a six-year strategic overhaul aimed at positioning the company as a leader in specialty food and beverage solutions. The transaction, valued at 6.5 times EV/EBITDA for the year ended 31 March 2024, will see Tate & Lyle receive cash proceeds of approximately $350 million, with net cash proceeds after tax and transaction costs expected to be around $270 million.
This decisive step follows the initial sale of a controlling interest in Primient to KPS in April 2022 and underscores Tate & Lyle’s commitment to innovation, customer-centricity, and category leadership. The deal not only values Tate & Lyle’s stake in Primient ahead of the previous valuation but also ensures supply security through robust long-term agreements established with Primient.
The completion of this transaction accelerates Tate & Lyle’s exit from Primient well before the original lock-up period’s expiry in 2030. It simplifies the company’s structure and sharpens its focus on global growth, particularly in the specialty food and beverage sector, which is increasingly driven by consumer demand for healthier and tastier options.
Tate & Lyle’s Board has outlined plans to return the net cash proceeds from the sale, estimated at $270 million, to shareholders through an on-market share buyback program. This initiative aligns with the company’s clear capital allocation policy and leverages the strength of its balance sheet. The buyback is slated to begin upon the transaction’s completion, anticipated by the end of July 2024.
With total cash proceeds from the full exit of Primient exceeding $1.5 billion, including dividends received since April 2022, Tate & Lyle is poised to embark on its next chapter as a streamlined, growth-focused entity in the dynamic food and beverage industry.
Commenting on the sale, Nick Hampton, Chief Executive said: “I am delighted that we have reached agreement with KPS for the sale of our remaining stake in Primient well ahead of the original lock-up period. This is testament to the relationships we have built with KPS and Primient, and the robust framework for the separation of Primient established two years ago. With this sale, the transformation of Tate & Lyle into a fully-focused speciality food and beverage solutions business is complete. We are now well-positioned to capture the significant growth opportunities ahead as we look to provide our customers with the solutions they need to meet growing consumer demand for healthier, tastier and more sustainable food and drink.”
Michael Psaros, Co-Founder and Managing Partner of KPS Capital Partners, said: “We are thrilled to acquire Tate & Lyle’s ownership interest in Primient and, upon completion of the purchase, KPS will be sole-owner of the company. Primient’s performance has exceeded our expectations, and we are very confident in its future. We thank Tate & Lyle for its constructive partnership with KPS over the past two years. Primient looks forward to continuing its positive relationship with Tate & Lyle as a supplier under the long-term supply agreements.”
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