REG - Tate & Lyle PLC - Disposal completion

Tate & LyleAnnouncement

01/04/2022 14:30

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RNS Number : 0033H  Tate & Lyle PLC  01 April 2022

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1 April 2022

Tate & Lyle PLC

("Tate & Lyle")

 

Completion of sale of a controlling stake in Tate & Lyle's

Primary Products business to KPS Capital Partners, LP

 

Outlook as we enter year ending 31 March 2023

 

Further to the announcement of 12 July 2021, Tate & Lyle announces that on
1 April 2022 it completed the sale of a controlling stake in a new company and
its subsidiaries (previously referred to as NewCo, now called "Primient"),
comprising its Primary Products business in North America and Latin America
and its interests in the Almidones Mexicanos S.A de C.V and DuPont Tate &
Lyle Bio-Products Company, LLC joint ventures, to KPS Capital Partners, LP
("KPS").  KPS now holds a 50.1% interest in Primient and has Board and
operational control.  Tate & Lyle now holds a 49.9% interest in Primient.

 

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.

 

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.  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.

 

We thank the team at Primient for their outstanding contribution to Tate &
Lyle and look forward to working closely with them in the future to ensure the
success of both businesses.

 

From today, all Tate & Lyle's people and investment will be dedicated to
growing our global food and beverage solutions business and we are excited
about its future potential."

 

Michael Psaros, Co-Founder and Managing Partner of KPS Capital Partners, said:

 

"KPS is pleased to have acquired a controlling interest in Primient. Over the
past several months KPS and Tate & Lyle have worked closely together to
establish Primient as an independent enterprise. Primient is now poised for
success as a leading, independent and focused manufacturer of critical
corn-derived ingredients for both food and industrial markets. We look forward
to working closely with Primient's management team to improve the new
company's assets and operations, accelerate the company's organic growth
initiatives and pursue synergistic acquisitions."

 

£500 million special dividend and share consolidation

 

As previously announced and reflecting its strong balance sheet, Tate &
Lyle 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.  A circular containing details of the special
dividend and share consolidation, as well as a notice convening a general
meeting of shareholders and details of the resolutions to be considered at
that general meeting, is expected to be published shortly.  If approved by
shareholders, the special dividend is expected to be paid in the second
quarter of the calendar year.

 

Outlook

 

Since our update published on 11 February 2022, trading has continued in line
with our expectations. As a result, our outlook for the year ended 31 March
2022 remains unchanged as set out below.

 

•    Continuing operations (new Tate & Lyle) growth in adjusted
profit before tax in constant currency is expected to be in the low
double-digit percent range

 

•    Total operations (Tate & Lyle Group) change in adjusted diluted
earnings per share in constant currency to be mid-single-digits percent lower
due to the performance of discontinued operations and cost inflation.

 

We enter the 2023 financial year with momentum, and we continue to see strong
demand for our ingredients and solutions which help our customers create
healthier food and drink.  As stated in our update of 11 February 2022, we
renewed customer contracts for the 2022 calendar year that offset expected
inflation.

 

The conflict in Ukraine is causing a significant escalation in raw material
(including corn), energy and logistics costs globally, especially in Europe.
We have committed agreements in place for key production inputs such as corn
and energy covering the majority of the first half of the 2022 calendar year.
 Input markets remain volatile and we will continue to take actions to
mitigate additional inflationary pressures, including supplementary price
increases across our main markets.  Our focus is on maintaining continuity of
supply and serving our customers.

 

Guided by our purpose, we are also actively supporting humanitarian relief
efforts for the Ukrainian people, in particular by supporting charities that
are providing food, clothes and shelter to refugees arriving in the regions of
Poland and Slovakia where we have operations.

 

We will provide a further update when we announce our results for the
financial year ended 31 March 2022 on 9 June 2022.

 

 

For more information contact:

 

For Tate & Lyle PLC

 

Investors and analysts

Christopher Marsh, VP Investor Relations

Tel: Mobile: +44 (0) 7796 192 688

 

Media

Nick Hasell, FTI Consulting

Tel: Mobile: +44 (0) 7825 523 383

 

For KPS Capital Partners, LP

 

Prosek Partners

Phil Walters, Tel: +44 777 333 1589 and Trevor Gibbons, Tel: +1 646 818-9238

pro-kps@prosek.com (mailto:pro-kps@prosek.com)

 

Information on Tate & Lyle

 

Tate & Lyle is a leading global provider of food and beverage ingredients
and solutions. Supported by our 160-year history of ingredient innovation, we
partner with customers to provide consumers with healthier and tastier choices
when they eat and drink. We are proud that millions of people around the world
consume products containing our ingredients every day.

 

Through our expertise in sweetening, mouthfeel and fibre fortification, we
develop solutions which reduce sugar, calories and fat, add fibre, and provide
texture and stability in categories including beverages, dairy, bakery, soups,
sauces and dressings.

 

We have more than 3,000 employees working in around 60 locations across 30
countries. Tate & Lyle's purpose is Transforming Lives Through the Science
of Food and through our purpose we believe we can successfully grow our
business and have a positive impact on society. We live our purpose in three
ways, by supporting healthy living, building thriving communities and caring
for our planet.

 

Tate & Lyle is listed on the London Stock Exchange under the symbol
TATE.L. American Depositary Receipts trade under TATYY. In the year ended 31
March 2021, Tate & Lyle's revenue from continuing operations totaled £1.2
billion.  For more information, please visit https://www.tateandlyle.com or
follow Tate & Lyle on Twitter or LinkedIn.

 

Information on KPS Capital Partners, LP

 

KPS, through its affiliated management entities, is the manager of the KPS
Special Situations Funds, a family of investment funds with approximately
US$13.1 billion of assets under management (as of December 31, 2021).  For
nearly three decades, the Partners of KPS have worked exclusively to realize
significant capital appreciation by making controlling equity investments in
manufacturing and industrial companies across a diverse array of industries,
including basic materials, branded consumer, healthcare and luxury products,
automotive parts, capital equipment and general manufacturing.  KPS creates
value for its investors by working constructively with talented management
teams to make businesses better, and generates investment returns by
structurally improving the strategic position, competitiveness and
profitability of its portfolio companies, rather than primarily relying on
financial leverage.  The KPS Funds' portfolio companies currently generate
aggregate annual revenues of approximately US$15.2 billion, operate 165
manufacturing facilities in 26 countries, and have approximately 43,000
employees, directly and through joint ventures worldwide (as of December 31,
2021, proforma for recent acquisitions).  The KPS investment strategy and
portfolio companies are described in detail at www.kpsfund.com.

 

Important notices

 

This announcement may contain certain forward-looking statements with respect
to the financial condition, results, operations and businesses of Tate &
Lyle. These statements and forecasts involve risk and uncertainty because they
relate to events and depend upon circumstances that will occur in the future.
There are a number of factors that could cause actual results or developments
to differ materially from those expressed or implied by these forward-looking
statements and forecasts.

 

This announcement is not intended to, and does not constitute or form part of,
and should not be construed as, any offer, invitation, solicitation or
recommendation of an offer to purchase, sell, subscribe for or otherwise
dispose of or acquire any securities or the solicitation of any vote or
approval in any jurisdiction and neither the issue of the information nor
anything contained herein shall form the basis of or be relied upon in
connection with, or act as an inducement to enter into, any investment
activity. No shares are being offered to the public by means of this
announcement. This announcement does not constitute either advice or a
recommendation regarding any securities, or purport to contain all of the
information that may be required to evaluate any investment in Tate & Lyle
or any of its securities and should not be relied upon to form the basis of,
or be relied on in connection with, any contract or commitment or investment
decision whatsoever. Past performance is not an indication of future results
and past performance should not be taken as a representation that trends or
activities underlying past performance will continue in the future.

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