Tate & Lyle to sell European starch operations
July 18, 2007
by Jeff Gelski
LONDON — Tate & Lyle, P.L.C. has agreed to sell its starch facilities in the United Kingdom, Belgium, France, Spain and Italy to Syral SAS, a subsidiary of Tereos of France. When the deal is completed, which could come as early as September, London-based Tate & Lyle will receive £209 million ($429 million) subject to closing adjustments relating to cash, debt, working capital and capital expenditure. Tate & Lyle plans to use the proceeds of the sale as part of a share buy-back program.
"The sale of these starch facilities marks another important step in focusing Tate & Lyle’s business on its value-added strategy and reduces the impact of our exposure to volatile markets and to the E.U. sugar regime," said Iain Ferguson, chief executive for Tate & Lyle, when the deal was announced July 18.
The starch business recorded sales of £520 million in the year ended March 31 and a profit before interest and exceptional items of £38 million. On March 31 the business had gross assets of £253 million and net operating assets of £184 million. The disposal is expected to result in an exceptional loss of about £20 million after restructuring costs.