KPS CAPITAL PARTNERS TO ACQUIRE TATE & LYLE'S OWNERSHIP INTEREST IN PRIMIENT

Rhea-AI Summary

KPS Capital Partners has agreed to acquire Tate & Lyle's remaining 49.7% stake in Primient for $350 million, with the transaction expected to close by July 2024. Primient, founded in 1906, is a leading producer of plant-based, renewable food and industrial ingredients, employing 1,800 people across six facilities in the US and Brazil. KPS initially acquired a controlling interest in Primient in April 2022, and this new investment underscores its commitment to the company. KPS plans to modernize Primient's operations, with over $700 million allocated for capital investments over the next five years. The acquisition will be financed through a mix of equity and debt, with Barclays leading the debt financing.

Positive

• KPS Capital Partners is acquiring Tate & Lyle's 49.7% stake in Primient for $350 million.
• The transaction is expected to close by July 2024.
• Primient is a leading producer of plant-based, renewable ingredients.
• Primient employs approximately 1,800 people across six manufacturing facilities in the US and Brazil.
• KPS plans to make over $700 million in capital investments in Primient over the next five years.
• Primient has completely transitioned all facilities to sustainable energy sources, phasing out coal.
• KPS continues to modernize Primient's operations, aiming for industry-leading sustainability practices.

Negative

• The acquisition is subject to customary closing conditions and approvals, introducing potential delays.
• Debt financing, led by Barclays, may increase financial liabilities for KPS.
• The $350 million expenditure could impact KPS's short-term liquidity.
• Relying on debt financing introduces interest rate risk and potential financial burden.

NEW YORK, May 23, 2024 /PRNewswire/ -- KPS Capital Partners, LP ("KPS") announced today that it has entered into a definitive purchase agreement with Tate & Lyle PLC (LSE: TATE.L, "Tate & Lyle") to acquire Tate & Lyle's remaining ownership interest of 49.7% in Primary Products Investments LLC ("Primient" or the "Company") for $350 million. Completion of the transaction is expected by end of July 2024 and is subject to customary closing conditions and approvals.

Primient is a leading producer of food and industrial ingredients made from plant-based, renewable resources. Founded in 1906 as A.E. Staley Manufacturing Co., Primient has an over 100-year history of producing corn-derived products in the United States. The Company produces corn-derived products which are used in a wide variety of applications including carbonated beverages, confectionary products, packaging applications and animal feed for some of the world's most recognizable food and beverage brands. Primient employs approximately 1,800 people across six manufacturing facilities in the United States and Brazil.

In April 2022, KPS acquired a controlling interest in Primient, Tate & Lyle's Primary Products Business in North America and Latin America. In connection with the transaction, Primient and Tate & Lyle entered into long-term agreements to provide security of supply to both Primient and Tate & Lyle's retained businesses.

Michael Psaros, Co-Founder and Co-Managing Partner of KPS, said, "Primient's performance has exceeded our expectations, and this second investment represents KPS' continued commitment to Primient, its customers and employees. Under our ownership, Primient will continue to modernize its operations, supporting growth initiatives and industry-leading sustainability practices. We intend to make further strategic investments to strengthen Primient's role within the corn wet milling industry and the broader bioeconomy." 

Jim Stutelberg, Chief Executive Officer of Primient, said, "We are excited for the future of Primient and to strengthen our partnership with KPS. Since KPS acquired Primient, I am incredibly proud of the tremendous progress we've made on our priorities of providing high-quality products and services to our customers and creating a safer workplace for our employees. Over the past two years, we have worked extensively with KPS to develop and execute our modernization and growth strategy to empower Primient to meet customer needs today and in the future. With strong KPS support, we are executing on more than $700 million in capital investments over the next five years to ensure the highest quality and most reliable production in the industry for decades to come. We believe the scale of our planned investments is unmatched in our industry and will position Primient to win new opportunities to serve the bioeconomy. In addition to the investments, Primient continues to set itself apart in the corn wet milling industry as the only corn wet miller to completely phase out coal, having transitioned all facilities to more sustainable energy sources, and enabling Primient to achieve its ambitious sustainability commitments." 

KPS expects to fund the investment through a combination of equity and debt financing. Paul, Weiss, Rifkind, Wharton & Garrison LLP is serving as legal counsel to KPS and its affiliates. Evercore is acting as exclusive financial advisor to KPS. Debt financing to support KPS' investment is being led by Barclays.

About Primient
Primient is a leading producer of food and industrial ingredients made from plant-based, renewable resources. Founded in 1906 as A.E. Staley Manufacturing Co., Primient has an over 100-year history of producing corn-derived products in the United States. The Company produces corn-derived products which are used in a wide variety of applications including carbonated beverages, confectionary products, packaging applications and animal feed for some of the world's most recognizable food and beverage brands. Primient employs approximately 1,800 people across six manufacturing facilities in the United States and Brazil. For more information, visit www.primient.com. 

About Tate & Lyle PLC
Tate & Lyle PLC is a world leading provider of ingredient solutions for healthier food and beverages. Tate & Lyle has an over 160-year history of ingredient innovation, and partners with customers to provide consumers with healthier and tastier choices when they eat and drink. Through its expertise in sweetening, fortification, and texture, Tate & Lyle develops ingredient solutions which reduce sugar, calories and fat, add fiber and protein, and provide texture and stability in categories including beverages, dairy, bakery, soups, sauces and dressings. Tate & Lyle's purpose is Transforming Lives through the Science of Food which is lived by supporting healthy living, building thriving communities and caring for the planet. For more information, visit www.tateandlyle.com.

About KPS Capital Partners, LP
KPS, through its affiliated management entities, is the manager of a family of investment funds with approximately $21.4 billion of assets under management (as of December 31, 2023). For over 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 $20.3 billion, operate 222 manufacturing facilities in 26 countries, and have approximately 48,000 employees, directly and through joint ventures worldwide (as of December 31, 2023). The KPS investment strategy and portfolio companies are described in detail at www.kpsfund.com. 

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SOURCE KPS Capital Partners, LP

FAQ

When is KPS Capital Partners expected to finalize the acquisition of Primient's remaining stake?

The transaction is expected to close by July 2024.

How much is KPS Capital Partners investing to acquire Tate & Lyle's stake in Primient?

KPS Capital Partners is investing $350 million to acquire Tate & Lyle's 49.7% stake in Primient.

What are the planned investments by KPS in Primient?

KPS plans to make over $700 million in capital investments in Primient over the next five years.

What does Primient specialize in producing?

Primient specializes in producing plant-based, renewable food and industrial ingredients.

How many employees does Primient have?

Primient employs approximately 1,800 people.

What is significant about Primient's energy transition?

Primient has completely phased out coal and transitioned all facilities to sustainable energy sources.