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.” Â
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.” Â
“This acquisition significantly strengthens our fortification capabilities and expands our customer offering in key food and drink categories.”