Ingredion buys Penford for $340 million

GLOBAL provider of ingredient solutions to diversified industries, Ingredion Incorporated, will acquire Penford Corporation, a specialty ingredients company based in the United States.

The acquisition, worth $340 million, has been approved by the boards of directors of both companies, and is subject to approval by Penford’s shareholders and regulators as well as to other customary closing conditions and could close as early as the end of the year.

With six plants in the US, Penford offers texture solutions for food, and its starch-based products for non-food applications are natural and designed as alternative to synthetic ingredients. For the fiscal year 2013, the company made net sales of $467 million.

 “This acquisition is another step in executing our strategic blueprint for growth. It expands our higher-value specialty portfolio, establishes manufacturing of specialty potato starches in North America, and builds our presence in nature-based hydrocolloid ingredients,” said Ilene Gordon, Ingredion chairman and CEO. “Penford’s range of products addresses growing consumer trends, including nutrition, gluten-free, food textures, and sustainable green solutions. The added capabilities will further enhance our efforts to deliver new, value-added solutions to the marketplace.”

Thomas Malkoski, president and CEO of Penford said, “This is a tremendous opportunity to combine Penford’s and Ingredion’s complementary product portfolios and capabilities. Ingredion is a recognized innovator in food ingredients and sustainable green solutions. The expanded portfolio and geographic reach of the combined company will enable new and exciting solutions for their customers and ours.”

 Ms Gordon added, "We are confident that this acquisition will create long-term value for our shareholders," Gordon said. The transaction is expected to generate annual cost synergies of at least $20 million, primarily from efficiencies in the areas of manufacturing, procurement, logistics and general and administrative functions. "We will move quickly to integrate the businesses, attain synergy savings and provide a broader offering of higher-value specialty products to our customers around the world."