KPS Capital Partners has agreed to acquire its joint venture partner Tate & Lyle’s remaining ownership interest of 49.7% in Primary Products Investments (Primient) for $350m.
The deal enables the American investment company to take full ownership of Primient. The latter produces food and industrial ingredients sourced from renewable, plant-based resources.
Primient was founded in 1906 under the name A.E. Staley Manufacturing and has a history of producing corn-derived products in the US.
Its portfolio includes diverse corn-derived offerings for carbonated beverages, confectionary goods, packaging solutions, and animal feed.
Primient has a workforce of around 1,800 individuals working across six manufacturing plants in the US and Brazil.
KPS Capital Partners secured a controlling stake in Primient in April 2022. The latter has been the primary products business of Tate & Lyle in North America and Latin America. Tate & Lyle is a UK-based food and beverage products supplier.
The deal will help Tate & Lyle streamline its operations and direct its full attention towards its role as a global, growth-oriented specialty food and beverage solutions provider.
KPS Capital Partners co-founder and co-managing partner Michael Psaros said: “Primient’s performance has exceeded our expectations, and this second investment represents KPS’ continued commitment to Primient, its customers and employees.
“Under our ownership, Primient will continue to modernise its operations, supporting growth initiatives and industry-leading sustainability practices.
“We intend to make further strategic investments to strengthen Primient’s role within the corn wet milling industry and the broader bioeconomy.”
In line with the latest acquisition, Primient and Tate & Lyle forged long-term agreements to ensure a consistent supply chain for both their retained businesses.
KPS Capital Partners anticipates financing the consideration through a combination of equity and debt financing.
The next phase of Primient’s growth includes capital investments of more than $700m over the next five years.
The funds will be used to modernise the company’s manufacturing infrastructure to sustain growth in the coming years.
Primient CEO Jim Stutelberg said: “Since KPS acquired Primient, I am incredibly proud of the tremendous progress we’ve made on our priorities of providing high-quality products and services to our customers and creating a safer workplace for our employees.
“Over the past two years, we have worked extensively with KPS to develop and execute our modernisation and growth strategy to empower Primient to meet customer needs today and in the future.”
The transaction is expected to be completed by the end of July, subject to customary closing conditions and approvals.
Paul, Weiss, Rifkind, Wharton & Garrison are providing legal counsel to KPS Capital Partners and its affiliates, while Evercore is serving as the exclusive financial adviser.
