American Sugar to Acquire Tate & Lyle Canadian Sugar Refining Business
On completion, Tate & Lyle will receive a net consideration of £132 million (C$299 million) subject to closing adjustments relating to working capital. The consideration will be used to reduce Group debt.
14/02/07 Tate & Lyle PLC has signed an agreement for the sale of Tate & Lyle Canada Ltd (Redpath) to American Sugar Refining, Inc. Redpath operates a cane sugar refinery in Toronto and a packing operation in Niagara Falls, Canada.
On completion, Tate & Lyle will receive a net consideration of £132 million (C$299 million) subject to closing adjustments relating to working capital. The consideration will be used to reduce Group debt.
The sale of Redpath is conditional upon regulatory approvals covering the Canadian competition bureau (anti-trust), foreign investment (Investment Canada Act) and taxation. These approvals and completion are expected within the next 90 days.
In the year to 31 March 2006, Redpath had total sales of £177 million and a profit before interest and exceptional items of £18 million. After adjusting for the mark-to-market gain on inventory and allocated costs, the underlying profit contribution to Tate & Lyle was also £18 million. At 30 September 2006 Redpath had gross assets of £110 million and net operating assets of £84 million.
Iain Ferguson, Chief Executive, Tate & Lyle said, “The sale of Redpath marks another important step in focusing Tate & Lyle’s business on its value added strategy. I would like to take this opportunity to thank our employees at Redpath for their commitment and hard work over the years and wish them every future success.”
Credit Suisse acted as exclusive financial adviser to Tate & Lyle.
