Friday, May 13 2022

Ingredients group Tate & Lyle has signed an agreement to to acquire Quantum Hi-Tech (Guangdong) Biological Co., Ltd (Quantum), a prebiotic dietary fiber business in China of ChemPartner Pharmatech Co., Ltd (ChemPartner) for a total amount of 237 million dollars (214 million euros) .

Quantum

Quantum engages in the research, development, production and sale of fructo-oligosaccharides (FOS) and galacto-oligosaccharides (GOS).

Together, FOS (from sucrose) and GOS (from milk sugar/lactose) account for approximately 25% of the global dietary fiber market, which is expected to grow at approximately 6% per year.

In China, which currently accounts for the majority of Quantum sales, the FOS and GOS market is expected to grow by around 10% per year.

Read more: Tate & Lyle sees third quarter trading ‘in line with expectations’

Details of the acquisition of Tate & Lyle

Tate & Lyle believes the acquisition of Quantum will “significantly strengthen” its position in dietary fibers, adding to its specialty fiber portfolio, R&D capabilities and proprietary manufacturing processes and technologies.

The agreement will enhance Tate & Lyle’s ability to provide added fiber solutions to its customers across a range of categories, including dairy, beverages, bakery and nutrition (including infant nutrition), and will address growing consumer interest in gut health.

It also expands Tate & Lyle’s presence in China and Asia, and expands its capabilities to create food and beverage solutions using its specialty ingredient portfolio.

The transaction is subject to shareholder approval of ChemPartner, a public listed company in China, of which Quantum is a wholly owned subsidiary.

Upon completion, consideration will be paid in cash for 100% of the interests in Quantum, Tate & Lyle noted.

For the 11 months ended November 30, 2021, Quantum generated revenue of US$46 million (€42 million) and EBITDA of US$14 million (€13 million).

The acquisition is expected to be accretive to Tate & Lyle’s revenue growth and EBITDA margin in the first year of ownership.

Manufacturing

Quantum produces its range of FOS and GOS fibers at its production site in Guangdong province, southern China.

The Quantum management team will join Tate & Lyle upon completion.

The transaction is expected to close in the second quarter of calendar year 2022.

Nick Hampton, Managing Director of Tate & Lyle, said: “We are delighted to announce the agreement to acquire Quantum, a leader in prebiotic dietary fiber and a company recognized for its high quality ingredients and solutions. This acquisition considerably strengthens our fortification capabilities. and expands our customer offering in key food and beverage categories.”

“The acquisition is also very much in line with our goal to support a healthy lifestyle by improving gut health and promoting sugar and calorie reduction and fiber enrichment for consumers around the world,” said he added. [Photo Courtesy: Nayeli Reyes Cuentos Culinarios]

© 2022 European supermarket magazine – your source for the latest A-Brands news. Article by Conor Farrelly. Click on subscribe register for ESM: European Supermarket Magazine.

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