NOT FOR RELEASE,
PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN, INTO OR FROM
ANY JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE
RELEVANT LAWS OF SUCH JURISDICTION
THIS ANNOUNCEMENT
CONTAINS INSIDE INFORMATION
FOR IMMEDIATE
RELEASE
23 May
2024
Tate & Lyle
PLC
("Tate
& Lyle")
Sale of the remaining interest in Primient
joint venture
to KPS Capital Partners, LP for US$350m (c.£279m)
Completes Tate & Lyle's
transformation to a growth-focused speciality
business
Proceeds from sale to be
returned to shareholders through a share buyback
programme
Over the last six years, Tate & Lyle has been
executing a major strategic transformation to become a
growth-focused speciality food and beverage solutions business.
This transformation has included a much sharper focus on
customers and categories, increased investments in innovation and
solution selling capabilities, and significantly strengthening our
sweetening, mouthfeel and fortification platforms through new
product development and acquisitions.
A critical step in this journey was the sale, in
April 2022, of a controlling interest in Primient, our primary
products business in North America and Latin America, to KPS
Capital Partners, LP ("KPS"). Today we are announcing an
agreement to sell our remaining 49.7% interest in Primary Products
Investments LLC ("Primient") to KPS (the "Transaction").
Transaction
highlights:
· Tate &
Lyle will receive cash proceeds of US$350 million (c.£279 million).
Net cash proceeds, after tax and transactions costs, are
expected to be around US$270 million (c.£215 million).
· The
Transaction values Tate & Lyle's 49.7% stake in Primient at
6.5x EV/EBITDA (year ended 31 March 2024), ahead of the valuation
of Primient on the sale of the initial controlling stake, completed
on 1 April 2022 (5.1x EV/EBITDA (year ended 31 March 2021)).
· Robust
long-term agreements put in place with Primient in April 2022 to
ensure supply security, with a remaining life of around 18 years,
will continue to operate following the Transaction.
· Total cash
proceeds from the full exit of Primient, including dividends
received since the sale of the initial holding in April 2022,
exceed US$1.5 billion.
The Transaction completes the staged exit from
Primient well ahead of expiry of the original lock-up period of
eight years which lasts until 1 April 2030. It also
simplifies the business and fully focuses Tate & Lyle as a
global, growth-focused speciality food and beverage solutions
business, aligned to attractive structural and growing consumer
trends for healthier, better tasting food and drink.
The Transaction proceeds will be payable in
cash at completion which is anticipated by the end of July
2024.
Use of
proceeds:
Consistent with the Board's clear capital
allocation policy and the strength of the Tate & Lyle balance
sheet, the Board intends to return the net cash proceeds received
from this Transaction (expected to be around US$270 million (c.£215
million)) to shareholders by way of an on-market share buyback
programme. The buyback is expected to commence on completion of the
Transaction.
Commenting on
the sale, Nick Hampton, Chief Executive said:
"I am delighted that we have reached agreement
with KPS for the sale of our remaining stake in Primient well ahead
of the original lock-up period. This is testament to the
relationships we have built with KPS and Primient, and the robust
framework for the separation of Primient established two years ago.
With this sale, the transformation of Tate & Lyle into a
fully-focused speciality food and beverage solutions business is
complete. We are now well-positioned to capture the
significant growth opportunities ahead as we look to provide our
customers with the solutions they need to meet growing consumer
demand for healthier, tastier and more sustainable food and
drink."
Michael Psaros, Co-Founder and Managing Partner of KPS Capital
Partners, said:
"We are thrilled to acquire Tate & Lyle's
ownership interest in Primient and, upon completion of the
purchase, KPS will be sole-owner of the company. Primient's
performance has exceeded our expectations, and we are very
confident in its future. We thank Tate & Lyle for its
constructive partnership with KPS over the past two years.
Primient looks forward to continuing its positive
relationship with Tate & Lyle as a supplier under the long-term
supply agreements."
Further details (including the pro-forma effect
of the Transaction on Tate & Lyle) are set out in the Notes
below.
Enquiries:
For
more information contact Tate & Lyle PLC:
Christopher Marsh, VP, Investor
Relations
Mobile: +44 (0)7796 192
688
Nick Hasell (FTI Consulting), Media
Relations
Mobile: +44 (0)7825 523
383
Notes:
1. The Transaction
constitutes a Class 2 transaction for Tate & Lyle under the UK
Listing Rules. The gross assets that are the subject of this
Transaction amounted to US$209m (£165m) at 31 March 2024. These
assets generated a reported profit before tax (at share) for the
financial year ended 31 March 2024 of US$32m (£25m).
2. PRO-FORMA RESTATEMENT
OF PRIOR YEAR FINANCIAL INFORMATION FOR THE SALE OF THE REMAINING
INTEREST IN THE PRIMIENT JOINT VENTURE
To assist with understanding the impact of the
Transaction, set out below is pro-forma financial information for
Tate & Lyle for the financial year ended 31 March 2024. The
pro-forma financial information is designed to show the
illustrative impact of the Transaction on continuing operations of
Tate & Lyle as if it had completed on 1 April 2023, being the
start of the period presented. The pro-forma adjustments show
a reduction in adjusted diluted earnings per share for each
period.
The Transaction has been treated as a
non-adjusting post balance sheet event in the results for the
financial year ended 31 March 2024, also announced on 23 May 2024.
As a result, the Transaction has given rise to no change in
Tate & Lyle's accounting for Primient or of its presentation in
the Tate & Lyle financial statements for the financial year
ended 31 March 2024.
|
|
|
|
Year ended 31 March 2024
|
|
|
|
£m unless otherwise
stated
|
Adjusted
reported
|
Impact of the
Transaction
|
Pro forma
|
Revenue
|
1
647
|
-
|
1
647
|
Adjusted EBITDA
|
328
|
-
|
328
|
Depreciation1
|
(57)
|
-
|
(57)
|
Amortisation
|
(13)
|
-
|
(13)
|
Adjusted operating profit
|
258
|
-
|
258
|
Net finance
expense1
|
(6)
|
-
|
(6)
|
Adjusted share of profit/(loss) of
joint venture
|
35
|
(35)
|
-
|
Adjusted profit before
tax
|
287
|
(35)
|
252
|
Adjusted income tax
expense
|
(62)
|
8
|
(54)
|
Adjusted profit for the
year
|
225
|
(27)
|
198
|
Effective tax rate expense
%
|
21.6%
|
|
21.1%
|
Diluted number of shares
outstanding:
|
404.2
|
|
404.2
|
Diluted earnings per share
(pence)
|
55.5p
|
(6.4p)
|
49.1p
|
1. No pro forma
adjustment for interest income generated from the proceeds has been
made as it has been assumed the net
proceeds received from this Transaction will be returned to
shareholders by way of an on-market share buyback
programme.
About Tate &
Lyle:
Supported by our 160-year history of
ingredient innovation, we partner with customers to provide
consumers with healthier and tastier choices when they eat and
drink. We are proud that millions of people around the world
consume products containing our ingredients every day.
Through our expertise in sweetening,
fortification, and texture, we develop ingredient solutions which
reduce sugar, calories, and fat, add fibre and protein, and provide
texture and stability in categories including beverages, dairy,
bakery, snacks, soups, sauces, and dressings.
We have more than 3,300 employees
working in around 58 locations serving customers across
121 countries. Science, Solutions, Society is our brand promise and
how we will achieve our purpose of Transforming Lives Through the
Science of Food. By living our purpose we believe we can
successfully grow our business and have a positive impact on
society. We live our purpose in three ways, by supporting healthy
living, building thriving communities and caring for our
planet.
Tate & Lyle is listed on the
London Stock Exchange under the symbol TATE.L. American Depositary
Receipts trade under TATYY. In the year to 31 March 2024, Tate
& Lyle revenue from continuing operations totalled £1.65
billion. For more information, please
visit https://www.tateandlyle.com or
follow Tate & Lyle on LinkedIn, X
(Twitter), Facebook or YouTube.
Tate & Lyle PLC's LEI number is:
2138008K14474WPKZ244
About KPS
KPS, through its affiliated
management entities, is the manager of the KPS Funds, 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 realise 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.
Forward looking statements
This announcement may contain certain
forward-looking statements, beliefs or opinions, including
statements with respect to Tate & Lyle's business, financial
condition and results of operations. These forward-looking
statements can be identified by the use of words such as
"anticipate", "expect", "estimate", "intend", "will", "may",
"project", "plan", "target" and "believe" and other words of
similar meaning in connection with any discussion of future events.
These statements, by their nature, involve risk, uncertainty and
qualifications because they relate to events and depend upon
circumstances that may or may not occur in the future. A number of
factors could cause actual results and developments to differ
materially from those expressed or implied by the forward-looking
statements in this announcement and accordingly all such statements
should be treated with caution. There can be no assurance that any
particular forward-looking information will be realised, and the
performance of Tate & Lyle may be materially and adversely
different from the forward-looking statements. Except where
otherwise stated, this announcement speaks as of the date hereof.
Other than in accordance with its legal or regulatory obligations,
Tate & Lyle is not under any obligation and Tate & Lyle
expressly disclaims any intention or obligation (to the maximum
extent permitted by law) to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise.
No statement in this announcement is
intended as a profit forecast or estimate for any period and no
statement in this announcement should be interpreted to mean that
earnings or earnings per share or income, cash flow from operations
or free cash flow for Tate & Lyle for the current or future
financial years would necessarily match or exceed the historical
published earnings or earnings per share or income, cash flow from
operations or free cash flow for Tate & Lyle.
Certain figures contained in this
announcement, including financial information, have been subject to
rounding adjustments. Accordingly, in certain instances, the sum or
percentage change of the numbers contained in this announcement may
not conform exactly to the total figure given.
Cautionary Statements
This announcement is not intended to,
and does not constitute or form part of, and should not be
construed as, any offer, invitation, solicitation or recommendation
of an offer to purchase, sell, subscribe for or otherwise dispose
of or acquire any securities or the solicitation of any vote or
approval in any jurisdiction and neither the issue of the
information nor anything contained herein shall form the basis of
or be relied upon in connection with, or act as an inducement to
enter into, any investment activity. No shares are being offered to
the public by means of this announcement. This announcement does
not constitute either advice or a recommendation regarding any
securities, or purport to contain all of the information that may
be required to evaluate any investment in Tate & Lyle or any of
its securities and should not be relied upon to form the basis of,
or be relied on in connection with, any contract or commitment or
investment decision whatsoever. Past performance is not an
indication of future results and past performance should not be
taken as a representation that trends or activities underlying past
performance will continue in the future.
Important information in relation to
advisors
Citigroup Global Markets Limited is
acting as exclusive financial adviser to Tate & Lyle on the
Transaction. Linklaters LLP is acting as legal advisor to Tate
& Lyle on the Transaction.
Citigroup Global Markets Limited
("Citi"), which is authorised by the Prudential Regulation
Authority ("PRA") and regulated in the UK by the Financial Conduct
Authority ("FCA") and the PRA, is acting as the sole advisor for
Tate & Lyle and for no one else in connection with the matters
described in this announcement and will not be responsible to
anyone other than Tate & Lyle for providing the protections
afforded to clients of Citi nor for providing advice in connection
with any other matters referred to in this announcement. Neither
Citi nor any of its affiliates, directors or employees owes or
accepts any duty, liability or responsibility whatsoever (whether
direct or indirect, consequential, whether in contract, in tort, in
delict, under statute or otherwise) to any person who is not a
client of Citi in connection with this announcement, any statement
contained herein or otherwise.
ENDS