KPS Capital Partners to acquire remaining stake in Primient for $350m

KPS Capital Partners, LP (“KPS”) has announced a definitive agreement to purchase the remaining 49.7% stake in Primary Products Investments LLC (“Primient“) from Tate & Lyle PLC (LSE: TATE.L) for $350 million. The transaction is expected to conclude by the end of July 2024, pending standard closing conditions and approvals.

Primient, a leader in the production of plant-based, renewable food and industrial ingredients, has been a significant player in the industry since its inception in 1906 as A.E. Staley Manufacturing Co. The company is renowned for its extensive range of corn-derived products, which are integral to numerous consumer products including beverages, confections, and animal feeds. Primient supports approximately 1,800 jobs across six manufacturing sites in the United States and Brazil.

The acquisition marks the culmination of Tate & Lyle’s strategic refocusing towards becoming a specialty food and beverage solutions enterprise, emphasizing growth, innovation, and customer-centric solutions. This transition has been bolstered by significant investment in product development and acquisitions aimed at enhancing capabilities in sweetening, texturing, and fortification.

KPS Capital Partners Secures Complete Ownership of Primient in $350M Deal with Tate & Lyle

Strategic Expansion and Industry Leadership

This latest transaction follows KPS’s initial acquisition of a controlling interest in Primient in April 2022, which positioned Primient as an independent entity focused on the North and Latin American markets. Since then, Primient has embarked on substantial modernization and growth initiatives under KPS’s stewardship.

Michael Psaros, Co-Founder and Co-Managing Partner of KPS, expressed his satisfaction with Primient’s performance and reiterated KPS’s commitment to further strategic investments aimed at enhancing Primient’s market position. “Primient’s performance has exceeded our expectations, and this second investment represents KPS’s continued commitment to Primient, its customers, and employees,” Psaros stated. “Under our ownership, Primient will continue to modernize its operations, supporting growth initiatives and industry-leading sustainability practices.”

Jim Stutelberg, CEO of Primient, highlighted the progress made since KPS’s acquisition, emphasizing the company’s focus on quality, customer service, and employee safety. Stutelberg outlined ambitious plans for future investments totaling over $700 million in the next five years to maintain high production standards and reliability.

A Sustainable Future

Primient is distinguished in the corn wet milling industry as the only major player to have completely transitioned away from coal, moving towards more sustainable energy sources. This shift aligns with the company’s ambitious sustainability goals and sets a benchmark in the industry for environmental responsibility.

As the transaction moves towards completion, both KPS and Tate & Lyle are poised to reinforce their respective positions in the global market, with Tate & Lyle focusing on its core specialty food and beverage solutions, and Primient expanding its footprint in the bioeconomy sector.

The acquisition of the remaining stake in Primient by KPS not only signifies a strategic consolidation of KPS’s investments in the bioeconomy but also marks a pivotal moment for Tate & Lyle in its transformation journey towards specialized food and beverage solutions. The deal, poised to close by July 2024, underscores a significant realignment within the food and industrial ingredient markets, promising enhanced growth and sustainability initiatives that are set to reshape the industry landscape.