Tate & Lyle completes sale of Primient stake to KPS Capital Partners for $350m

Tate & Lyle PLC has concluded the sale of its remaining 49.7% interest in Primary Products Investments LLC (Primient) to KPS Capital Partners, LP for a total cash consideration of USD 350 million (approximately GBP 279 million). This strategic transaction not only marks the end of Tate & Lyle’s involvement with Primient but also signifies a pivotal shift in the company’s focus towards becoming a growth-oriented specialty business in the food and beverage sector.

Details of the Transaction

The sale price, set at 6.5 times the enterprise value to earnings before interest, taxes, depreciation, and amortization (EV/EBITDA) for the year ended March 31, 2024, represents a premium over the valuation at the time of the initial sale of a controlling interest in April 2022. After accounting for tax and transaction costs, the net cash proceeds are expected to be around USD 270 million (approximately GBP 215 million).

Strategic Transformation and Shareholder Returns

Over the past six years, Tate & Lyle has undergone a significant transformation, sharpening its focus on specialty solutions in the food and beverage industry. This strategic pivot has involved enhancing customer engagement, boosting innovation, and expanding the company’s capabilities in sweetening, mouthfeel, and fortification through both product development and strategic acquisitions.

Following the closure of this deal, Tate & Lyle plans to return the net proceeds from the sale to its shareholders through an on-market share buyback program. This decision underscores the company’s robust financial position and commitment to delivering shareholder value.

Comments from Corporate Leadership

Nick Hampton, Chief Executive Officer of Tate & Lyle, expressed his satisfaction with the deal, stating, “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 specialty food and beverage solutions business is complete. We are now well-positioned to capture the significant growth opportunities ahead.”

Michael Psaros, Co-Founder and Managing Partner of KPS Capital Partners, also commented on the acquisition: “We are thrilled to acquire Tate & Lyle’s ownership interest in Primient and, upon completion of the purchase, KPS will be the sole owner of the company. Primient’s performance has exceeded our expectations, and we are very confident in its future.”

The transaction between Tate & Lyle and KPS Capital Partners reflects a strategic realignment for Tate & Lyle, focusing on core growth areas within the specialty food and beverage sector. The sale not only simplifies Tate & Lyle’s business structure but also enhances its financial flexibility, allowing for increased focus on innovation and market expansion in line with evolving consumer preferences for healthier and better-tasting food and drink options.