Tate & Lyle PLC has signed an agreement to acquire Quantum Hi-Tech Biological Co. Ltd., a leading prebiotic dietary fiber business from ChemPartner Pharmatech Co. Ltd. for a total consideration of $237 million.
Tate & Lyle PLC (London, UK) has signed an agreement to acquire Quantum Hi-Tech Biological Co. Ltd. (Guangdong Province, Southern China), a leading prebiotic dietary fiber business from ChemPartner Pharmatech Co. Ltd. for a total consideration of $237 million. Quantum performs research and development, production, and sale of fructo-oligosaccharides (FOS) and galacto-oligosaccharides (GOS). The acquisition expands Tate & Lyle’s presence in China, and strengthens its position as a global player in dietary fibers, bringing a high-quality portfolio of speciality fibers, strong R&D capabilities and proprietary manufacturing processes and technologies. It also expands Tate & Lyle’s ability to provide added-fiber solutions for its customers across a range of categories including dairy, beverages, bakery, and nutrition (including infant nutrition), and to meet growing consumer interest in gut health.
“We are delighted to announce the agreement to acquire Quantum, a leader in prebiotic dietary fibers and a business recognized for its high-quality ingredients and solutions. This acquisition significantly strengthens our fortification capabilities and expands our customer offering in key food and drink categories,” said Nick Hampton, chief executive of Tate & Lyle, in a press release. “FOS and GOS are highly complementary to our existing fiber portfolio and will enable us to offer a broader range of solutions to our customers. The acquisition is also very much in line with our purpose to support healthy living by improving gut health, and driving sugar and calorie reduction and fiber fortification for consumers across the world.”
The transaction is subject to approval by the shareholders of ChemPartner, a public company listed in China, of which Quantum is a wholly-owned subsidiary. Once complete, consideration will be paid in cash for 100% of the equity interests in Quantum. Quantum’s generated revenue for the 11 months ending November 30, 2021 was $46 million and EBITDA of $14 million. In the first year of ownership, the acquisition is expected to be accretive to revenue growth and EBITDA margin for Tate & Lyle.
“We are proud of the Quantum business we have built over the last 20 years, providing high-quality products to support healthier living for people across China and beyond,” said Zeng Xianwei, chairman of the board of ChemPartner, in a press release. “Tate & Lyle, with its global customer reach, strong focus on R&D, and strong fiber portfolio, is the ideal company to take Quantum on the next stage of its development. I wish them and the management team at Quantum success in the future.”