Global provider of food and beverage ingredients, Tate & Lyle, has agreed to purchase ChemPartner Pharmatech’s leading prebiotic dietary fibre business, Quantum Hi-Tech Biological (Quantum) in China, for $237m.
Tate & Lyle’s position as a major player in dietary fibres has been greatly strengthened by the takeover of Quantum, which brings a high-quality portfolio of specialty fibres, strong R&D capabilities, and proprietary manufacturing processes and technologies.
Tate & Lyle’s ability to supply added-fibre solutions for its clients across a range of sectors, including dairy, beverages, bakery, and nutrition has improved as a result of the acquisition.
The acquistion of Quantum also strengthens Tate & Lyle’s footprint in China and Asia is strengthened, as well as its ability to develop food and beverage solutions using its leading speciality ingredient portfolio.
Quantum’s fructo-oligosaccharides (FOS) and galacto-oligosaccharides (GOS) fibres are manufactured in the Guangdong Province of Souuthern China. When the acquisition is completed, Quantum’s management team will join Tate & Lyle.
The deal is expected to close in the Q2 2022, however is subject to the approval of the shareholders of ChemPartner.
At the end of the transaction, consideration of £237m will be paid in cash for all of Quantum’s equity shares.
Quantum had sales of $46m and EBITDA of $14m in the 11 months ended November 30, 2021. Tate & Lyle forecasts the acquisition to boost sales growth and EBITDA margin in the first year under its operation.
Mr. Zeng Xianwei, Chairman, ChemPartner, said, “Tate & Lyle, with its global customer reach, strong focus on R&D, and strong fibre portfolio, is the ideal company to take Quantum on the next stage of its development.”
QUANTUM
Quantum specialises in FOS and GOS research, development, production, and sale.
FOS from sucrose and GOS from milk sugar or lactose, together account for around 25% of the total dietary fibres market, which is expected to rise at a rate of 6% per year.
The FOS and GOS market in China, which accounts for the majority of Quantum’s revenues, is expected to increase at a rate of roughly 10% per year.
Tate & Lyle shares rose 3.6% to 745p after the company announced its takeover of Quantum.
“We are delighted to announce the agreement to acquire Quantum, a leader in prebiotic dietary fibres and a business recognised for its high-quality ingredients and solutions,” stated Nick Hampton, Chief Executive Officer, Tate & Lyle.
“FOS and GOS are highly complementary to our existing fibre portfolio and will enable us to offer a broader range of solutions to our customers.”
“This acquisition significantly strengthens our fortification capabilities and expands our customer offering in key food and drink categories.”