Tate & Lyle PLC has recently signed an agreement to acquire China-based Quantum Hi-Tech (Guangdong) Biological Co., Ltd (Quantum), a leading prebiotic dietary fibre business, from ChemPartner Pharmatech Co., Ltd (ChemPartner) for US$237 million.
Quantum engages in the research, development, production and sale of fructo-oligosaccharides (FOS) and galacto-oligosaccharides (GOS). Together, FOS (from sucrose) and GOS (from milk sugar/lactose) represent around 25% of the global dietary fibres market which is forecast to grow at around 6% per annum. In China, which currently represents the majority of Quantum’s sales, the FOS and GOS market is forecast to grow at around 10% per annum.
The acquisition will significantly strengthen Tate & Lyle’s position as a leading global player in dietary fibres, bringing a high-quality portfolio of speciality fibres, strong R&D capabilities and proprietary manufacturing processes and technologies. The acquisition expands Tate & Lyle’s ability to provide added-fibre solutions for its customers across a range of categories including dairy, beverages, bakery and nutrition (including infant nutrition), and to meet growing consumer interest in gut health. It also significantly expands Tate & Lyle’s presence in China and Asia, and extends its capabilities to create solutions across food and drink utilising its leading speciality ingredient portfolio.
The transaction is however subject to approval by its parent shareholders in ChemPartner, a public-listed company in China. For the 11 months ended 30 November 2021, Quantum generated revenue of US$46 million. Quantum produces its range of FOS and GOS fibres at its production site in Guangdong, Southern China.
Nick Hampton, Chief Executive at Tate & Lyle said, “We are delighted to announce the agreement to acquire Quantum, a leader in prebiotic dietary fibres and a business recognised for its high-quality ingredients and solutions. This acquisition significantly strengthens our fortification capabilities and expands our customer offering in key food and drink categories. FOS and GOS are highly complementary to our existing fibre portfolio and will enable us to offer a broader range of solutions to our customers. The acquisition is also very much in line with our purpose to support healthy living by improving gut health, and driving sugar and calorie reduction and fibre fortification for consumers across the world.”
Tate & Lyle is a leading global provider of food and beverage ingredients and solutions, with strong expertise in sweetening, mouthfeel and fibre fortification. Its Food & Beverage Solutions business develops solutions which reduce sugar, calories and fat, add fibre, and provide texture and stability in wide categories including beverages, dairy, bakery, soups, sauces and dressings. Its Primary Products business produces nutritive sweeteners, industrial starches used in paper and packaging, acidulants and products used for animal nutrition.