Ingredion Completes $340 Million Acquisition of Penford
12 Mar 2015 --- Ingredion Incorporated has successfully completed the $340 million acquisition of Penford Corporation, a US-based leader in specialty ingredients for food and non-food applications.
The transaction closing remains subject to regulatory approvals (including the expiration or termination of the waiting period) and other customary closing conditions. Upon completion of the transaction, Penford Corporation will become a wholly-owned subsidiary of Ingredion Incorporated.
Penford Corporation develops, manufactures and markets specialty ingredient systems for a variety of food and industrial products. Penford operates six manufacturing facilities and three research and development centers in the United States.
“This is a great opportunity for Ingredion. Penford’s expertise in potato starch, non-starch texturizers (hydrocolloids) and green solutions expands our capabilities to address growing consumer trends. Plus, their complementary portfolio of higher-value specialty ingredients will take us into new and profitable sectors. We are looking forward to a bright future together,” said Ilene Gordon, Ingredion chairman and CEO.
“We will begin the integration immediately to capture synergies, provide a broader offering of higher-value specialty products to our customers around the world and continue to deliver shareholder value,” Gordon added.
The integration is expected to generate annual cost synergies of at least $20 million, primarily from efficiencies in the areas of manufacturing, procurement, logistics and general and administrative functions. Excluding one-time costs, the transaction is expected to be $0.08 – $0.12 accretive to earnings on a per share basis in 2015.
Claire Regan at Ingredion told FoodIngredientsFirst that it is too early to provide specific details of the integration plans: “but we expect to leverage our global network as we do with many of our existing products.”
She noted that the move is part of a strategic plan to broaden their portfolio. “We will be able to offer customers unique and superior texture solutions with customized blends of starches and hydrocolloids, and additional sustainable nature-based solutions as alternatives to nonrenewable choices,” says Regan.
“The Penford acquisition is a great opportunity to expand our portfolio of high-value specialty products. We’re adding manufacturing of specialty potato starches and building presence in hydrocolloids. This also expands our green solutions offerings, and addresses growing consumer trends: gluten-free, non-GMO, enhanced food textures and sustainability,” she concludes.
Penford common stock has ceased trading on the NASDAQ Stock Market. Penford will be incorporated into Ingredion’s $3.1 billion North American business, led by Jim Zallie, Ingredion executive vice president of global specialties and president of North America and EMEA. Tom Malkoski,Penford’s president and chief executive officer, will join Ingredion as a senior advisor on strategic projects to promote specialties growth. Reporting to Ingredion CEO Gordon, Malkoski will also support the integration of Penford.
by Robin Wyers
