TIDMTATE
RNS Number : 8376E
Tate & Lyle PLC
12 July 2021
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QUALIFIED OR MAY HAVE QUALIFIED AS INSIDE INFORMATION WITHIN THE
MEANING OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014
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THE EUROPEAN UNION (WITHDRAWAL) ACT 2018
FOR IMMEDIATE RELEASE
12 July 2021
Tate & Lyle PLC
("Tate & Lyle")
Tate & Lyle to be re-positioned as a growth-focused
global
speciality food and beverage solutions business
Proposed sale of a controlling stake in Tate & Lyle's
Primary Products business to KPS Capital Partners, LP
Tate & Lyle announces that it has entered into an agreement
to sell a controlling stake in a new company and its subsidiaries
("NewCo"), comprising its Primary Products business in North
America and Latin America and its interests in the Almidones
Mexicanos S.A de C.V ("Almex") and DuPont Tate & Lyle
Bio-Products Company, LLC ("Bio-PDO") joint ventures, to KPS
Capital Partners, LP ("KPS") (the "Proposed Transaction"). Tate
& Lyle and KPS will each own 50% of NewCo with KPS having Board
and operational control.
TRANSACTION HIGHLIGHTS
-- Creates two standalone businesses - Tate & Lyle and NewCo
- each positioned to focus on their respective strategies and
capital allocation priorities:
o Tate & Lyle - A leading global food and beverage solutions
business focused on faster growing speciality markets.
o NewCo - A leader in plant-based products for the food and
industrial markets.
-- Values the whole of NewCo at an enterprise value of
approximately US$1.7bn (c.GBP1.2bn), equivalent to a multiple of
5.1x EBITDA for the year ended 31 March 2021.
-- Tate & Lyle expects to receive gross cash proceeds of
approximately US$1.3bn (c.GBP0.9bn), resulting in net cash proceeds
of approximately US$1.2bn (c.GBP0.9bn) after customary adjustments
and transaction costs.
-- Following completion, the Board intends that approximately
GBP0.5bn (US$0.7bn) be returned to Tate & Lyle's shareholders
by way of a special dividend and associated share consolidation.
The balance will be retained to strengthen Tate & Lyle's
balance sheet, provide flexibility to invest to accelerate growth
and for potential tax arising as a result of the Proposed
Transaction.
-- 20-year long-term agreements have been established between
Tate & Lyle and NewCo to provide supply security and economic
protection over the Food & Beverage Solutions' ("FBS") products
made in NewCo's facilities, and to ensure continued alignment of
objectives between the two companies. 75% of Tate & Lyle's
revenue in the year ended 31 March 2021 was generated from
manufacturing facilities that will remain under its own
control.
-- It is expected that NewCo will generate significant and
steady free cash flow with the ability to pay meaningful dividends
over time to Tate & Lyle and KPS. Tate & Lyle will also
benefit from potential value upside from retaining a substantial
equity stake in NewCo.
-- Completion is expected in the first quarter of the 2022
calendar year subject to approval by Tate & Lyle's
shareholders, anti-trust clearances, completion of a reorganisation
and IT separation and other customary conditions. A circular to
shareholders will be posted and the General Meeting will be
scheduled in due course.
STRATEGIC RATIONALE FOR TATE & LYLE - FOCUS ON ACCELERATING
GROWTH
-- Transformational move re-positions Tate & Lyle as a
global food and beverage solutions business focused on faster
growing speciality markets, with opportunity to:
o Benefit from growing global consumer demand for healthier food
and drink, accelerated by the global pandemic.
o Build on FBS' strong track record of growth over the last
three years through a step-up in R&D investment to accelerate
innovation.
o Increase focus on solutions development to support and
strengthen customer relationships.
-- Strengthens Tate & Lyle's attractiveness as a partner to
other speciality ingredients businesses.
-- Substantially reduces exposure to commodities markets and bulk ingredients in North America.
-- Strengthens Tate & Lyle's balance sheet and creates a
platform to re-focus capital towards delivering stronger organic
and inorganic growth.
-- Strategic re-positioning supports ambition for five years following completion:
o Organic revenue growth of mid single-digit percent per
annum
o Operating margin expansion of at least 50 to 100 basis points
per annum
o Organic return on capital employed improvement of 50 basis
points per annum on average.
NEWCO'S OPERATIONS
NewCo will comprise Tate & Lyle's Primary Products business
in North America and Latin America consisting of the following
operations:
-- Corn wet mills in the US in Decatur, Illinois, Lafayette, Indiana and Loudon, Tennessee.
-- Acidulants plants in Dayton, Ohio, Duluth, Minnesota (both US) and Santa Rosa, Brazil.
-- 50% shareholdings in two joint ventures - Almex in
Guadalajara, Mexico and Bio-PDO, in Loudon, Tennessee, US.
-- Grain elevator network and bulk transfer stations in North America.
Primary Products' European operations, which in aggregate
represented approximately 5% of Primary Products revenue in the
year ended 31 March 2021, are not included in NewCo and will remain
with Tate & Lyle.
In the financial year ended 31 March 2021, on a proforma basis,
NewCo generated revenues of GBP1.7bn and adjusted operating profit
of GBP165m. As at 31 March 2021, NewCo had gross assets of
GBP1.3bn.
KPS CAPITAL PARTNERS, LP
KPS is a leading global private equity firm, headquartered in
New York, that makes controlling equity investments in companies
across a diverse array of industries. KPS invests exclusively in
manufacturing and industrial companies. Its portfolio companies
currently generate nearly US$11 billion in annual revenue and
operate 149 manufacturing facilities in 22 countries with over
35,000 employees worldwide.
KPS is known for its ability to execute complex corporate
carve-out transactions on a global scale, and corporate carve-outs
represent over 50% of its platform investments. In 2021, KPS
created Speira to acquire the largest aluminum rolling business in
Europe from Norsk Hydro and announced that it is acquiring the
European Tinplate Packaging business of Crown Holdings, with Crown
Holdings partnering with KPS by retaining 20% of the new company.
Over the past year, KPS acquired Lufkin Industries from Baker
Hughes and Schlumberger's Rod Lift Business and IKG from Harsco in
connection with corporate carve-out transactions.
Nick Hampton, Chief Executive of Tate & Lyle, commented:
"Today's announcement represents the next phase in the evolution
of Tate & Lyle. Our one strong company will become two stronger
businesses, both in a position to pursue new and exciting growth
opportunities in their respective markets.
Building on the strong platform established over the last three
years, the proposed transaction will transform Tate & Lyle into
a purpose-led, global food and beverage solutions business, serving
faster growing speciality markets. 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. Our deep scientific expertise, unique
product portfolio and leading technical capabilities in sweetening,
mouthfeel and fortification, position us very well to benefit from
growing consumer demand for food and drink that is lower in sugar,
calories and fat, and with added fibre. With the pandemic
accelerating the trend towards healthier food, now is the right
time to focus our business on capturing this growth.
We have been very impressed with KPS and are excited to partner
with them in the next phase of the development of the Primary
Products business. KPS has proven expertise in managing and
creating value from large manufacturing businesses, and we look
forward to working with them under the long-term agreements we have
established to provide supply security and economic protection to
both businesses, and to jointly benefit from cash dividends and
future value creation.
The proposed transaction represents an ambitious and bold step
forward for Tate & Lyle. Driven by our purpose, all our people,
expertise and investment will be dedicated to growing our global
food and beverage solutions business and creating healthier food
and drink. An exciting future lies ahead for Tate & Lyle."
Michael Psaros, Co-Founder and Managing Partner of KPS Capital
Partners, said:
"KPS is excited to make a controlling investment in Primary
Products and is honoured to partner with Tate & Lyle for many
years to come. KPS and Tate & Lyle have complete alignment of
interests and have cemented a partnership based on shared values
such as the safety of our respective employees and a demonstrated
commitment to sustainability.
KPS believes that Primary Products is a superior investment
opportunity and that there is a tremendous opportunity to
materially increase revenues, productivity and profitability. We
look forward to working with the existing Primary Products
management team and its employees to build on the great platform
they have established and drive future growth."
PRESENTATION TO ANALYSTS AND INVESTORS TODAY
Presentation only
An audio presentation by Chief Executive, Nick Hampton will be
available to view on our website from 07.00 (BST) today. To access
the presentation, visit
https://www.investis-live.com/tate-and-lyle/60e6be8780fc9310002fc7b6/tyui
. Please note that the Q&A will not be accessible via this
link.
Presentation with Q&A
The presentation will be live streamed at 08.30 (BST), and will
then be followed by a live Q&A session with Nick Hampton, Chief
Executive and Vivid Sehgal, Chief Financial Officer. To view and
listen to this video webcast and Q&A, visit
https://www.investis-live.com/tate-and-lyle/60e6c34f80fc93100030013d/mjgf
.
Please note that only sell-side analysts and any pre-registered
buy-side investors will be able to ask questions during the Q&A
session. Sell-side analysts will be automatically pre-registered.
To pre-register, please contact Lucy Huang at
lucy.huang@tateandlyle.com . The archive version of the audio
webcast with Q&A will be available on the same link at
https://www.investis-live.com/tate-and-lyle/60e6c34f80fc93100030013d/mjgf
within two hours of the end of the live broadcast.
For more information contact:
For Tate & Lyle PLC
Investors and analysts
Christopher Marsh, VP Investor Relations
Tel: Mobile: +44 (0) 7796 192 688
Media
Nick Hasell, FTI Consulting
Tel: Mobile: +44 (0) 7825 523 383
Citigroup Global Markets Limited
(Joint Lead Financial Adviser, Sole Sponsor and Joint Corporate
Broker to Tate & Lyle)
+44 207 986 4000
Andrew Seaton
Jan Skarbek
David Fudge
Christopher Wren
Ondra LLP
(Joint Lead Financial Adviser to Tate & Lyle)
+44 207 082 8750
Michael Tory
Mark Todd
Maicol Grande
Greenhill
(Financial Adviser to Tate & Lyle)
+44 207 198 7400
Seamus Moorhead
David Wyles
BofA Securities
(Financial Adviser to Tate & Lyle and Joint Corporate
Broker)
+44 207 628 1000
Tim Waddell
Oliver Elias
For KPS Capital Partners, LP
Prosek Partners (Media)
Tel: +44 777 333 1589
Phil Walters
or pro-kps@prosek.com
PROPOSED SALE OF A CONTROLLING STAKE IN NEWCO, RE-POSITIONING
TATE & LYLE AS A GROWTH FOCUSED FOOD AND BEVERAGE SOLUTIONS
BUSINESS, AND UNLOCKING SIGNIFICANT VALUE FOR TATE & LYLE'S
SHAREHOLDERS
Introduction and background to the Proposed Transaction
Tate & Lyle has built a strong platform over the last three
years, delivering improving momentum particularly in its Food &
Beverage Solutions business where revenue has grown by a compound
annual growth rate of 4%. This establishes a strong platform for
Tate & Lyle to consider the Proposed Transaction.
On 25 April 2021, Tate & Lyle announced that it was in the
process of exploring the potential separation of its Food &
Beverage Solutions and Primary Products businesses through a sale
of a controlling stake in its Primary Products business to a new
long-term financial partner. The Board stated that it believed if a
transaction of this nature was completed it would enable Tate &
Lyle and the new business to focus their respective strategies and
capital allocation priorities and create the opportunity for
enhanced shareholder value.
The opportunity to acquire a controlling stake in Tate &
Lyle's Primary Products business attracted significant levels of
interest from potential partners, leading to the agreement today
with KPS. The Tate & Lyle Board believes that the Proposed
Transaction will allow NewCo to fulfil its growth potential through
the combined expertise and resources of Tate & Lyle and KPS. It
also crystallises significant value for Tate & Lyle's
shareholders, while maintaining an interest in a standalone NewCo
offering cash dividends and potential for further value realisation
in the future.
Re-positioning Tate & Lyle as a global speciality food and
beverage solutions business
Tate & Lyle's long-term strategic ambition has been to focus
on growing its Food & Beverage Solutions ("FBS") business. The
Proposed Transaction will deliver on that ambition and represents a
clear opportunity to accelerate its strategy to become a
growth-focused speciality business.
-- Re-positions Tate & Lyle as a leading global food and
beverage solutions business focused on faster growing speciality
markets with opportunity to:
o Benefit from growing global consumer demand for healthier food
and drink, accelerated by the global pandemic.
o Build on FBS' strong track record of growth over the last
three years through a step-up in R&D investment to accelerate
innovation.
o Ambition over the five years following completion to increase
R&D spend to more than 4% of FBS revenue per annum, and to grow
revenue from New Products to around 20% of FBS revenue by the 2026
financial year.
o Increase focus on solutions development to support and
strengthen customer relationships.
-- Strengthens Tate & Lyle's attractiveness as a partner to
other speciality ingredients businesses.
-- Substantially reduces exposure to commodities markets and bulk ingredients in North America.
-- Strengthens Tate & Lyle's balance sheet and creates a
platform to re-focus capital towards delivering stronger organic
and inorganic growth.
-- Strategic re-positioning supports ambition for five years following completion:
o Organic revenue growth of mid single-digit percent per
annum
o Operating margin expansion of at least 50 to 100 basis points
per annum
o Organic return on capital employed improvement of 50 basis
points per annum on average.
NewCo perimeter and information on NewCo
The Proposed Transaction will involve the sale of Tate &
Lyle's Primary Products business, including Tate & Lyle's
equity stake in the two joint ventures of Almex and Bio-PDO but
excluding its operations in Europe which will be retained by Tate
& Lyle (in aggregate these European operations represented
approximately 5% of Primary Products revenue in the year ended 31
March 2021). The sale perimeter therefore comprises selected
production facilities in the US and Brazil which predominantly
produce products for the Primary Products business, including:
-- Three corn wet mills: Decatur, Illinois; Lafayette, Indiana; Loudon, Tennessee (all US)
-- Three acidulant plants: Dayton, Ohio; Duluth, Minnesota (both US); Santa Rosa, Brazil
-- Tate & Lyle's grain elevator and bulk transfer station
networks in the US (comprising 13 grain elevators and four bulk
transfer stations)
-- 50% equity stake in two joint ventures: Almex and Bio-PDO
The NewCo perimeter was defined to best align the total asset
portfolio according to the focus of finished goods production.
Tate & Lyle Ingredients America LLC, the main operating
company of NewCo, is a leading producer of high-volume food and
industrial products predominantly derived from corn and serves over
500 customers primarily in the Americas. Key products manufactured
include bulk sweeteners, industrial starches for paper and
packaging, acidulants and animal nutrition products.
Given KPS will have majority of the voting rights in Newco,
majority Board voting rights and operational control, Tate &
Lyle will cease to consolidate NewCo in its financial statements on
completion. Primary Products (except for the retained European
operations) will be classified as held for sale and disclosed as a
discontinued business in Tate & Lyle's results for the six
months ending 30 September 2021. Tate & Lyle will equity
account for its interest in NewCo as a joint venture following
completion.
Proforma financial information for Tate & Lyle and NewCo for
the financial year ended 31 March 2021, prepared on the basis that
the Proposed Transaction completed on 1 April 2020 is provided at
Appendix 1.
Key terms of the Proposed Transaction
Tate & Lyle and KPS have today entered into a sale and
purchase agreement ("SPA") and agreed the terms of a joint venture
agreement related to the Proposed Transaction. The key terms of
these agreements are summarised below.
Financial
The Proposed Transaction values the entire enterprise value of
NewCo at approximately US$1.7bn, representing a multiple of
approximately 5.1x EBITDA for fiscal 2021. The enterprise value
includes US$122m of IFRS 16 leases related to railcars and US$38m
related to a guarantee that will be transferred to NewCo.
In conjunction with the Proposed Transaction, KPS has secured
commitment letters from banks to support the raising of
approximately US$1.1bn of new external debt by NewCo. The proceeds
of this external debt will be received by Tate & Lyle
immediately following completion pursuant to the repayment or
transfer of certain existing intragroup debt outstanding at
completion by NewCo. The total gross consideration payable to Tate
& Lyle in relation to the Proposed Transaction is therefore
expected to be US$1.3bn (before transaction costs, separation costs
and tax), comprising the amount received from the repayment or
transfer of certain existing intragroup debt which will be funded
by NewCo from proceeds of the external debt and payment related to
the purchase of KPS's equity interest of approximately 50% in
NewCo. The final net proceeds to be received by Tate & Lyle in
respect of KPS' equity interest in NewCo is subject to customary
adjustments, including amongst other adjustments, NewCo's cash,
debt and debt-like items and working capital at completion. After
such adjustments, as well as transaction costs, net proceeds to
Tate & Lyle are estimated to be US$1.2bn. This excludes
separation costs to be incurred up to closing and estimated
potential tax payable on the Proposed Transaction, together
currently expected to be not more than US$130m.
Following the Proposed Transaction, Tate & Lyle will
continue to own 50% of NewCo (rounded to the nearest whole number)
and will benefit from potential value creation in NewCo in the
future. It is expected that NewCo will generate significant and
steady free cash flow with the ability to pay meaningful dividends
over time to Tate & Lyle and KPS.
Other terms of the SPA
-- Completion will be subject to a number of conditions being
satisfied, including amongst others (i) the approval of the
Proposed Transaction by Tate & Lyle's shareholders, (ii)
certain antitrust clearances, (iii) the completion of a
reorganisation to separate the NewCo business and the FBS business,
(iv) the completion of an IT separation.
-- If KPS fails to pay the purchase price due to Tate & Lyle
following the satisfaction of the conditions, Tate & Lyle may
terminate the SPA and, if it elects to exercise its termination
right, KPS will be required to pay a fee of US$44,500,000 to Tate
& Lyle.
-- If the Board of Tate & Lyle fails to include or changes a
unanimous recommendation in the circular to the Tate & Lyle
shareholders to vote in favour of the Proposed Transaction and (in
certain cases) the shareholders proceed to vote against the
Proposed Transaction at the General Meeting, KPS (and in certain
cases Tate & Lyle) is entitled to terminate the SPA and, if
such termination right is exercised, Tate & Lyle will be
required to reimburse KPS for any costs and expenses it has
incurred in connection with the Proposed Transaction up to a
maximum of US$18,000,000.
-- Tate & Lyle will give a customary set of warranties to
KPS in relation to the NewCo business, however its liability for a
breach of the business warranties will be capped at US$1, with KPS
having recourse only under a warranty and indemnity insurance
policy.
-- Tate & Lyle has also agreed certain business-related
indemnities in connection with the Proposed Transaction.
Joint Venture Agreement
-- Following completion, KPS will have the right to appoint four
directors to (and therefore control) the Board of NewCo. Tate &
Lyle will have the right to appoint two directors to the board of
NewCo if it holds at least a 20% interest in NewCo and one director
if it holds at least 10%. One independent director will be jointly
appointed.
-- Each of Tate & Lyle and KPS will hold a 50% interest in
NewCo (rounded to the nearest whole number) but KPS will hold a
majority of the voting rights in NewCo. KPS will also have
operational control of NewCo (including its business plan), subject
to certain shareholder reserved matters which require the approval
of both Tate & Lyle and KPS unless Tate & Lyle's interest
falls below 20%.
-- The business plan for the initial three years from completion
has been agreed between Tate & Lyle and KPS. Future business
plans and budgets will be subject to NewCo board approval.
-- Tate & Lyle and KPS will be restricted from directly or
indirectly selling their interests in NewCo from completion for
eight years (for Tate & Lyle) and four years (for KPS).
-- KPS also has the right to initiate an IPO of NewCo after four years.
-- If KPS exits the joint venture after its lock-up period, KPS
will have the right to exercise a drag- along right in respect of
all of Tate & Lyle's interest at the sale price KPS agrees to
sell at. If KPS does not exercise its drag-along right, Tate &
Lyle will have a tag-along right. KPS will also have a tag-along
right if Tate & Lyle exits the joint venture after its lock-up
period.
Management and employees of NewCo
Tate & Lyle's Primary Products division currently has its
own management team led by Jim Stutelberg (President) that is
responsible for the operations and performance of the business on a
day-to-day basis, reporting into Tate & Lyle's Group
management. Given the importance of these individuals to NewCo's
operations and prospects, it is intended that the Primary Products
management team will remain in place following completion of the
Proposed Transaction.
Timing and conditions
The Proposed Transaction constitutes a Class 1 transaction under
the Listing Rules. Completion is conditional upon, amongst other
things, approval of Tate & Lyle shareholders at a General
Meeting. Accordingly, a circular containing full details of the
Proposed Transaction, the resolutions and the Board's
recommendation, and the notice convening a General Meeting at which
such approval for the Resolutions will be sought, will be published
in due course.
Long-term agreements and transitional services agreements
between Tate & Lyle and NewCo
Long-term agreements have been established between Tate &
Lyle and NewCo and will be put in place following completion to
provide supply security and economic protection over key products
between the two companies, to ensure continued alignment of
objectives and reduce dis-synergies from the Proposed
Transaction.
Most notably, this includes:
-- 20-year manufacturing and supply and tolling agreements
pursuant to which NewCo will continue to manufacture and supply FBS
products to Tate & Lyle at its facilities following
completion.
-- A 20-year reverse tolling agreement pursuant to which Tate
& Lyle will continue to manufacture and supply certain primary
products to NewCo from its Sagamore facility following
completion.
-- A Net Raw Materials agreement under which NewCo will provide
corn procurement services to Tate & Lyle (including the
purchase of corn futures) following completion.
Tate & Lyle and KPS have agreed a transitional services
agreement and a reverse transitional services agreement, which will
govern the provision of certain services between Tate & Lyle
and NewCo for a transitional period following completion.
Use of proceeds and Tate & Lyle's proposed capital
allocation following completion
Net proceeds are expected to be US$1.2bn after customary
adjustments and transaction costs. This excludes separation costs
to be incurred up to closing and estimated potential tax payable on
the Proposed Transaction, together currently expected to be not
more than US$130m.
Of these proceeds, Tate & Lyle intends to return
approximately GBP0.5bn (c.US$0.7bn) to shareholders after
completion by way of a special dividend with associated share
consolidation.
Tate & Lyle will retain the remaining net proceeds to
strengthen its balance sheet and is targeting a net leverage
position close to zero post completion, providing flexibility to
fund future growth. Tate & Lyle intends to maintain a strong
balance sheet with leverage at levels consistent with investment
grade metrics.
The Proposed Transaction repositions Tate & Lyle as a
growth-focused speciality FBS business, however the Board continues
to recognise the importance of the dividend to total shareholder
returns. Consistent with the sale of a controlling stake in the
Primary Products business, it is intended to reduce the dividend to
reflect the earnings base of the re-focused Tate & Lyle. The
pay-out ratio is expected to be maintained and the dividend per
share re-based by around 50%, before the impact of the share
consolidation. Following completion, it is intended to return
GBP0.5bn to shareholders and undertake a share consolidation. From
there, it is intended that the progressive dividend policy will be
maintained. Completion of the Proposed Transaction is expected in
Q1 of calendar year 2022, therefore it is expected that the interim
dividend for the 2022 financial year will be paid as usual, with
the full year dividend for the 2022 financial year then being
re-based.
Intended recommendation
The Board of Tate & Lyle believes the Proposed Transaction
is in the best interests of Tate & Lyle's shareholders.
Accordingly, the Directors intend unanimously to recommend in the
Circular that shareholders vote in favour of the resolution at the
General Meeting to be convened to consider the Proposed
Transaction.
Information on Tate & Lyle
Tate & Lyle PLC is a leading global provider of food and
beverage ingredients and solutions. 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, mouthfeel and fibre
fortification, our Food & Beverage Solutions business develops
solutions which reduce sugar, calories and fat, add fibre, and
provide texture and stability in categories including beverages,
dairy, bakery, soups, sauces and dressings.
Tate & Lyle's purpose is Improving Lives for Generations and
through 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. For
more information, please visit http://www.tateandlyle.com or follow
Tate & Lyle on Twitter or LinkedIn.
Information on KPS Capital Partners, LP
KPS, through its affiliated management entities, is the manager
of the KPS Special Situations Funds, a family of investment funds
with approximately US$12.8 billion of assets under management (as
of March 31, 2021). For nearly three decades, the Partners of KPS
have worked exclusively to realize 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 US$10.9 billion, operate
149 manufacturing facilities in 22 countries, and have
approximately 35,000 employees, directly and through joint ventures
worldwide (as of March 31, 2021, proforma for recent acquisitions).
The KPS investment strategy and portfolio companies are described
in detail at www.kpsfund.com.
Important notices
Citigroup Global Markets Limited ("Citigroup"), which is
authorised by the Prudential Regulation Authority and regulated in
the UK by the Financial Conduct Authority and the Prudential
Regulation Authority, is acting as financial adviser for Tate &
Lyle and for no one else in connection with the Transaction and
other matters described in this announcement, and will not be
responsible to anyone other than Tate & Lyle for providing the
protections afforded to clients of Citigroup nor for providing
advice in connection with the Transaction or any other matters
referred to in this announcement. Neither Citigroup 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
Citigroup in connection with this announcement, any statement
contained herein, the Transaction or otherwise.
Ondra LLP ("Ondra"), which is authorised and regulated in the UK
by the Financial Conduct Authority, is acting as financial adviser
for Tate & Lyle and for no one else in connection with the
Transaction and other matters described in this announcement, and
will not be responsible to anyone other than Tate & Lyle for
providing the protections afforded to clients of Ondra nor for
providing advice in connection with the Transaction or any other
matters referred to in this announcement. Neither Ondra 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 Ondra in
connection with this announcement, any statement contained herein,
the Transaction or otherwise.
Greenhill & Co. International LLP ("Greenhill"), which is
authorised and regulated in the UK by the Financial Conduct
Authority, is acting as financial adviser to the Board of Tate
& Lyle and for no one else in connection with the Transaction
and other matters described in this announcement, and will not be
responsible to anyone other than Tate & Lyle for providing the
protections afforded to clients of Greenhill nor for providing
advice in connection with the Transaction or any other matters
referred to in this announcement. Neither Greenhill 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
Greenhill in connection with this announcement, any statement
contained herein, the Transaction or otherwise.
Merrill Lynch International ("BofA Securities"), is acting
exclusively for the Board of Tate & Lyle in connection with the
Transaction and other matters described in this announcement and
for no one else and will not be responsible to anyone other than
the Board of Tate & Lyle for providing the protections afforded
to its clients or for providing advice in relation to the
Transaction or other matters described in this announcement.
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.
The distribution of this announcement in jurisdictions in or
from certain jurisdictions may be restricted or prohibited by the
laws of any jurisdiction other than the United Kingdom. Recipients
are required to inform themselves of, and comply with, all
restrictions or prohibitions in such other jurisdictions. Any
failure to comply with applicable requirements may constitute a
violation of the laws and/or regulations of other such
jurisdiction.
This announcement has been prepared for the purposes of
complying with the applicable law and regulation of the United
Kingdom (including the Listing Rules and the Disclosure Guidance
and Transparency Rules) and the information disclosed may not be
the same as that which would have been disclosed if this
announcement had been prepared in accordance with the laws and
regulations of any jurisdiction outside of the United Kingdom.
This announcement is being distributed to all owners of Ordinary
shares and American Depository Receipts. A copy of this
announcement can be found on our website at www.tateandlyle.com. A
hard copy of this statement is also available from the Company
Secretary, Tate & Lyle PLC, 1 Kingsway, London WC2B 6AT.
Cautionary note regarding forward-looking information
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 (including under the
Listing Rules, the Disclosure Guidance and Transparency Rules and
the Prospectus Rules), 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 (including any statement of
estimated synergies) 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.
Except as explicitly stated, neither the content of Tate &
Lyle's website (or any other website) nor any website accessible by
hyperlinks on Tate & Lyle's website (or any other website) is
incorporated in, or forms part of, this announcement.
Appendix 1 - Reconciliation of financials
Proforma financial information for Tate & Lyle PLC
reflecting the proposed transaction
Year ended 31 March 2021 Revenue Adjusted Operating Return on
Profit Capital Employed
GBPm GBPm %
Tate & Lyle PLC as reported(1) 2 807 339 17%
Adjusted for
NewCo disposed activities(2) (1 596) (172) (1)%
Impact of long-term agreements(3) - (7) -
Stranded costs(4) - (2) -
Tate & Lyle PLC: proforma 1 211 158 16%
------------- ------------------- ------------------
Proforma financial information for the NewCo reflecting the
proposed transaction
Year ended 31 March 2021 Revenue Adjusted Operating
Profit
GBPm GBPm
Primary Products division as reported(5) 1 686 158
Adjusted for
Perimeter adjustment(6) (90) 14
--------------- -------------------
NewCo disposed activities 1 596 172
Impact of long-term agreements(7) 124 7
Impact of cost disynergies(8) - (14)
NewCo: proforma 1 720 165
--------------- -------------------
1. Amounts taken directly from the Annual Report and Accounts of
Tate & Lyle PLC for the year ended 31 March 2021.
2. Refer to details in proforma financial information for NewCo.
3. Long-term agreements result in pro-forma re-allocation of
certain items of cost and income such that Tate & Lyle PLC will
take a greater portion of costs than is currently allocated to the
Food & Beverage Solutions operating segment. In addition, NewCo
will receive a mark-up on certain costs incurred in providing the
services under the long-term agreements.
4. Principally relates to employees who are shared between the
Food & Beverage Solutions and Primary Products operating
segments today and who will remain with Tate & Lyle after the
Proposed Transaction. Such costs are shown before any activities to
mitigate stranded costs.
5. Amounts taken directly from the Annual Report and Accounts of
Tate & Lyle PLC for the year ended 31 March 2021 - refer to
Note 5 Segment Information.
6. Relates to the European Primary Products business that is not
subject to the Proposed Transaction.
7. See footnote 3.
8. Represents additional staff costs required in NewCo in order
to replicate back-office activities currently shared across Tate
& Lyle PLC.
The above information is not intended to constitute proforma
financial information for the purpose of the UK Listing Rules.
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END
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(END) Dow Jones Newswires
July 12, 2021 02:00 ET (06:00 GMT)
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