Ingredion mining for acquisition ‘gems’

by Eric Schroeder
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NEW YORK — A few years removed from its acquisition of National Starch, Westchester, Ill.-based Ingredion Inc. remains on the lookout for “gems” that would add value to the company and its customers, said Ilene Gordon, chairman, president and chief executive officer. Ms. Gordon spoke May 30 at the Citi 2013 Global Consumer Conference in New York.

In introducing Ms. Gordon before her presentation, David Driscoll, an analyst with Citigroup, Inc., commended her for the “strategic vision” she has brought to Ingredion since her arrival in 2009, noting that she has “taken this company to a new level.” Specifically, he mentioned Ms. Gordon’s role in leading Ingredion’s acquisition of National Starch, a transaction he called “one of the single best acquisitions that I’ve witnessed in the food industry.”

Following Ms. Gordon’s prepared remarks, Mr. Driscoll asked her to provide some context on what the world looks like from a mergers and acquisition perspective, and whether the potential is there for another acquisition the size of National Starch, or whether it’s more likely Ingredion will seek out three or four smaller type acquisitions.

“I think the answer is, if there was another National Starch, we would do it,” Ms. Gordon said. “We’d be the guys to do it. And so I think the answer is, it will be a combination. … There are a lot of very small companies that I think would not add enough value, but the $50 million to $100 million to $200 million companies, they’re out there. They may be in Europe. They may be a division of a larger company. They may be a family privately-held company, but they would be making us more important to our customers.

They may be other texturizers that, again, would help us formulate for our customers and be more important, and yet they would have an applicability to other parts of the world.”

Beyond just broadening the portfolio, Ms. Gordon said Ingredion also may look to grow by building its presence in other markets. She said the company may consider “more of the core ingredients in an India or China, where then you would do a build-up of a couple of facilities. Then you could grow those with those different economies.”

“I think the bottom line is, we see with our balance sheet, it’s two to three to four of those over a three-year period,” she said. “And we’re looking for those gems that would add value to us and our customers, but that we can buy at the right price. Because we are good stewards of shareholder value, and we want them, we want to be able to pay the right price that then we can take it and create value for our shareholders.”

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