Tate & Lyle PLC (LON:TATE) has announced a split of its business as it is selling a stake in its plant-based arms to private equity group KPS Capital Partners for £900mln.
KPS will own 50% of the Primary Products business in North America and Latin America and the group’s interests in the Almidones Mexicanosand DuPont Tate & Lyle Bio-Products Company, and will take control of the board and operations.
READ: Tate & Lyle mulls split as it emerges profitably from pandemic
The sale will create two standalone businesses: Tate & Lyle – focused on speciality markets – and NewCo – entirely plant-based. The latter is valued at £1.2bn.
Tate & Lyle said it will dish out a special dividend of £500mln to shareholders, while the remaining £400mln from the transaction will be used to invest in growth and pay taxes.
Completion is expected in the first quarter of 2022 if approved by shareholders and the authorities.
“With our new focus and a step-up in R&D investment, innovation and solutions development, we will be able to significantly enhance how we serve our customers, and accelerate growth,” said the firm’s chief executive Nick Hampton.
“With the pandemic accelerating the trend towards healthier food, now is the right time to focus our business on capturing this growth.”