Global processor of agricultural products Louis Dreyfus Commodities has entered into a definitive agreement to acquire Imperial Sugar Company, one of the major processors and marketers of refined sugar in the US, for $203m.
Under the agreement, a subsidiary of Louis Dreyfus Commodities will buy Imperial Sugar through a cash tender offer and second step merger.
The proposed deal has been approved by board of directors of the refined sugar company.
Louis Dreyfus Commodities chief executive officer Mikael Morn said Imperial Sugar is an established operator in the sugar industry in North America, and is a good strategic fit for the company.
"This transaction is an important step forward in our plan to grow and diversify our global sugar activities from sugar cane crushing and international sugar trading into sugar refining and distribution in major consumer markets," Morn added.
According to the terms of the agreement, Louis Dreyfus Commodities will begin a cash tender offer by 11 May 2012, and the transaction is expected to close during the second calendar quarter of 2012.
Louis Dreyfus will fund the acquisition through available cash and existing credit lines and the offer will not be subject to a financing condition.
Founded in 2001, Imperial Sugar is a major processor and marketer of refined sugar in the US to food manufacturers, retail grocers and foodservice distributors.
The Company markets products across the country under the Imperial, Dixie Crystals, and Holly brands.
In April this year, the Texas-based refined sugar processor has sold its 50% stake in Wholesome Sweeteners to an affiliate of Arlon, a private investment group focused on food and agriculture, for $60.4m.
In January, the company announced that its fourth-quarter loss in last fiscal year had increased and that it plans to sell assets as rising prices of sugar and rising losses put pressure on its financial resources.
Louis Dreyfus Commodities and its subsidiaries has diversified agricultural business in North America and operate in the cotton, grains, oilseeds, sugar, coffee, and juice markets.
Image: The acquisition is an important step forward in Louis Dreyfus' plan to grow and diversify its global sugar activities from sugar cane crushing and international sugar trading into sugar refining and distribution in major consumer markets. Photo: Lauri Andler(Phantom).