(Sharecast News) - Food and beverage ingredients provider Tate & Lyle said on Thursday that it had agreed to acquire Chinese prebiotic dietary fibre business Quantum Hi-Tech Biological for $237.0m.
Tate & Lyle stated the acquisition of Quantum, which engages in the research, development, production and sale of fructooligosaccharides and galactooligosaccharides, was fully aligned with its strategy to become a growth-focussed food and beverage solutions business and would strengthen its position as "a leading global player" in the fast-growing global dietary fibres market.
The FTSE 250-listed firm noted that the transaction, still subject to approval by the shareholders of Quantum's current owner ChemPartner Pharmatech, will be paid for in cash.
Tate & Lyle added that the acquisition was expected to be accretive to revenue growth and EBITDA margins in the first year of ownership.
For the 11 months ended 30 November 2021, Quantum generated revenue of $46.0m and underlying earnings of $14.0m.
Chief executive Nick Hampton said: "This acquisition significantly strengthens our fortification capabilities and expands our customer offering in key food and drink categories. 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.
"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."
As of 0815 BST, Tate & Lyle shares were up 2.90% at 740.24p.
Tate & Lyle (TATE)
