Tate & Lyle trumpets leading position in ‘mouthfeel’ solutions
Published: 19:47 07 Nov 2024 AEDT
Tate & Lyle PLC (LSE:TATE) is in the final stages of its $1.8 billion acquisition of CP Kelco, a transaction the foodtech giant hopes will make it a global leader in the ‘mouthfeel’ industry.
Per a half-year trading update, regulatory clearance has been secured for the deal, with completion expected shortly.
Tate & Lyle is acquiring CP Kelco’s operations in the US, China and additional subsidiaries from J.M. Huber Corporation.
Mouthfeel refers to the physical sensations a food or drink creates in the mouth, separate from its flavour or taste. It includes factors like creaminess, crispiness, chewiness, and smoothness.
CP Kelco specialises in producing nature-based hydrocolloid ingredients that enhance the mouthfeel of various food and beverage products.
Its portfolio includes pectin, gellan gum, xanthan gum, and citrus fiber, which are used to modify texture and improve stability.
From a financial perspective, Tate & Lyle anticipates revenue growth of between 4% and 6% yearly, with plans to significantly improve its adjusted EBITDA margin over the coming years.
This represents a substantial improvement from current finances. Revenue in the first half fell 7% year on year to £775 million, although better margins led to a 13% increase in earnings per share to 30.6p each.
”We will transition into one business between completion and 31 March 2025,” said the group.
