Subscribe Login
DE4CC0DE-5FC3-4494-BCBF-4D50B00366B5
A-Brands

Tate & Lyle To Acquire Chinese Dietary Fibre Business Quantum

Ingredients group Tate & Lyle has signed an agreement to acquire Quantum Hi-Tech (Guangdong) Biological Co., Ltd (Quantum), a prebiotic dietary fibre business in China from ChemPartner Pharmatech Co., Ltd (ChemPartner) for a total consideration of $237 million (€214 million).

Quantum

Quantum engages in the research, development, production, and sale of fructo-oligosaccharides (FOS) and galacto-oligosaccharides (GOS).

Together, FOS (from sucrose) and GOS (from milk sugar/lactose) represent around 25% of the global dietary fibres market which is forecast to grow at around 6% per annum.

In China, which currently represents the majority of Quantum’s sales, the FOS and GOS market is forecast to grow at around 10% per annum.

Read More: Tate & Lyle Sees Third-Quarter Trading 'In Line With Expectations'

Details Of Tate & Lyle Acquisition

Tate & Lyle believes that the acquisition of Quantum will 'significantly strengthen' its position in dietary fibres, adding to its  portfolio of speciality fibres, R&D capabilities, and proprietary manufacturing processes and technologies.

The deal will boost Tate & Lyle’s ability to provide added-fibre solutions for its customers across a range of categories including dairy, beverages, bakery, and nutrition (including infant nutrition), and meet growing consumer interest in gut health.

It also expands Tate & Lyle’s presence in China and Asia, and extends its capabilities to create solutions across food and drink utilising its speciality ingredient portfolio.

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.

At completion, consideration will be paid in cash for 100% of the equity interests in Quantum, Tate & Lyle noted.

For the 11 months ended 30 November 2021, Quantum generated revenue of US$46 million (€42 million) and EBITDA of US$14 million (€13 million).

The acquisition is expected to be accretive to revenue growth and EBITDA margin for Tate & Lyle in the first year of ownership.

Manufacturing

Quantum produces its range of FOS and GOS fibres at its production site in Guangdong Province, Southern China.

The management team of Quantum will join Tate & Lyle at completion.

The transaction is expected to close in the second quarter of the 2022 calendar year.

Nick Hampton, chief executive at Tate & Lyle, said, "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. This acquisition significantly strengthens our fortification capabilities and expands our customer offering in key food and drink categories."

"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 fibre fortification for consumers across the world," he added. [Photo Courtesy: Nayeli Reyes Cuentos Culinarios]

© 2022 European Supermarket Magazine – your source for the latest A-Brands news. Article by Conor Farrelly. Click subscribe to sign up to ESM: European Supermarket Magazine.

Stay Connected With Our Weekly Newsletter

Processing your request...

Thanks! please check your email to confirm your subscription.

By signing up you are agreeing to our Terms & Conditions and Privacy Policy
Enjoy unlimited digital access for 30 days
Get exclusive access to the latest grocery retail & FMCG news, interviews with industry leading executives, and expert analysis on the trends shaping the sector today
Enjoy unlimited digital access for 30 days
Enjoy unlimited digital access for 30 days
Get exclusive access to the latest grocery retail & FMCG news, interviews with industry leading executives, and expert analysis on the trends shaping the sector today
Enjoy unlimited digital access for 30 days