Ingredion to Acquire TIC Gums for $400 Million

967153d0-a3c7-4d40-a0b5-2f9255c59145articleimage.jpg

20 Dec 2016 --- Ingredion has entered into a stock purchase agreement to acquire all of the outstanding shares of TIC Gums Incorporated, a privately held, U.S.-based company that provides advanced texture systems to the food and beverage industry. Its expertise with gum-based texturizers complements Ingredion’s expertise in starch technology, opening the door to new texture solutions for today’s food formulations.

The acquisition has been approved by Ingredion’s board of directors and the stockholders of TIC Gums. It is expected to close by the end of the year, subject to customary closing conditions. 

Ingredion expects to fund the $400 million cash transaction with available cash and short-term credit. Excluding one-time costs, the transaction is expected to be $0.04 - $0.05 accretive to adjusted EPS in the first year.

Claire Regan, Director, Corporate Communications at Ingredion told FoodIngredientsFirst: “Part of Ingredion's strategy is to broaden our portfolio and the TIC acquisition expands our higher-value specialty portfolio with even more texture offerings. Ingredion is a leader in texture innovation with starch-based ingredients and TIC expands our offerings with non-starch hydrocolloids (primarily gums). The acquisition propels us into a new era of on-trend texture development with even more solutions for natural, organic and clean-label demands.” 

She notes: “Our plans are to grow the business. Ingredion’s global presence and portfolio of starch-based texturants offer opportunity for more robust growth and expansion. Finally, we will continue to evaluate future opportunities to execute our strategy and deliver shareholder value.”

TIC Gums enables food innovation by combining several types of texturizers into systems that work synergistically in foods and beverages. The company has access to a variety of agriculturally derived ingredients, such as gum acacia and guar, and a deep understanding of their performance. These nature-based ingredients form the foundation for innovative texture systems and allow for clean-label reformulation.

Corie Breyers of TIC Gums told FoodIngredientsFirst: “With the very amicable acquisition comes even more value-add opportunities that we will be able to provide to our customers. Sharing and implementing best practices from each company will also improve the customer experience. In addition to the current value that customers receive, they will benefit from an unprecedented breadth of gum, hydrocolloid and starch solutions to meet their needs.  It’s a great opportunity for both companies and we are looking forward to what is coming in the New Year.” 

Together, Ingredion and TIC Gums will offer the widest range of texture capabilities, superior formulation expertise and rapid response to customer needs. The acquisition will expand Ingredion’s higher-value specialty portfolio and customer base in the fast-growing segment of small-to-medium-sized food and beverage companies that are driving industry innovation. 

“As a leader in texture systems for decades, TIC Gums has grown significantly over the past several years through its deep R&D expertise and a differentiated and focused approach to the customer experience. The team has an excellent track record in developing and delivering proprietary, customized systems. This acquisition propels us into a new era of on-trend texture development with even more solutions for organic and clean-label demands,” explained, Ilene Gordon, Ingredion chairman and CEO. 

“Combined with Ingredion’s global presence and portfolio of starch-based texturizers, there’s even more opportunity for robust growth and expansion,” Gordon added.

“TIC Gums’ and Ingredion’s strengths complement each other perfectly. We share a vision around the importance of texture and stabilization in food and beverage formulation. By coming together, we will truly be able to focus on the correct technical solutions for our customers whether they be starch, gum or systems containing both. Ingredion’s global footprint will enable us to achieve our geographical expansion goals much faster than we otherwise could on our own. We believe our business model strength in clean label formulation with the most dynamic players in the food and beverage space has significant untapped potential on the global stage,” said TIC Gums President Gregory Andon. 

TIC operates two production facilities, one in the United States and one in China, and state-of-the-art R&D labs in both countries. The company conducts business worldwide and employs over 200 people.

Ingredion’s last major acquisition in ingredients was the $340 million acquisition of Penford Corporation, a US-based leader in specialty ingredients for food and non-food applications, which was closed in early 2015. It helped Ingredion expand its portfolio of high-value specialty products, adding manufacturing for specialty potato starches and building presence in hydrocolloids.

Earlier this month, Ingredion entered into an agreement with SweeGen Inc., a company dedicated to the development and manufacture of stevia-based sweeteners, to be SweeGen's exclusive global distributor of the company's novel, nature-based stevia sweeteners in all markets except China. Ingredion will be a non-exclusive distributor in China. 

by Robin Wyers

Related Articles

Food Ingredients News

Agricultural organizations call for EU-UK trade deal

17 Nov 2017 --- Trade in agri-commodities and food and drink products represents 11 percent of bilateral trade flows between the 27 EU member states and the UK. As a consequence of Brexit, unprecedented challenges and a high level of uncertainty prevail, according to Celcaa, Copa and Cogeca and FoodDrinkEurope, which are all calling for a comprehensive EU-UK trade deal. 

Business News

Hi-tech start-ups awarded at MassChallenge Switzerland awards ceremony

17 Nov 2017 --- Seven companies, from a short-list of 75 start-ups selected for a four-month acceleration program this summer by MassChallenge Switzerland, have been selected to receive financial prizes. 

Business News

UK: Which supermarkets routinely use antibiotics in their meat production?

17 Nov 2017 --- As World Antibiotic Awareness Week draws to a close, campaign group, The Alliance to Save our Antibiotics, is calling for reductions to farm antibiotic use across the EU and for an end to routine preventative medication of groups of animals. Its new report discloses which UK supermarkets routinely use antibiotics in their meat production.

Food Ingredients News

FDA issues GRAS No Objection Letter for Reb D sweetener

17 Nov 2017 --- SweeGen, Inc., a nature-based sweetener company, and Ingredion have jointly announced that the US Food and Drug Administration (FDA) issued a GRAS (Generally Recognized As Safe) No Objection Letter for BESTEVIA Rebaudioside D stevia leaf sweetener for use as a general-purpose, non-nutritive sweetener for foods and beverages.

Business News

Palm oil smallholder farmers receive funding boost

17 Nov 2017 --- The United Nations Environment Project (UN Environment) and the Roundtable on Sustainable Palm Oil (RSPO) have signed a small-scale funding agreement that aims to support oil palm smallholder farmers toward improved livelihood and sustainable production. 

More Articles