Ingredion portfolio may expand further

by Jeff Gelski
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BRIDGEWATER, N.J. — Ingredion, Inc. will stay in an acquisition mode after announcing Oct. 15 it plans to buy Penford Corp., said Ilene Gordon, chairman, president and chief executive officer of Ingredion. The company wants to expand its portfolio further, and gums and hydrocolloids are in play, she said in an interview Oct. 15 during an innovation center event in Ingredion’s Bridgewater location.

Ingredion, based in Westchester, Ill., and active in corn starch ingredients and other specialty ingredients, expects to pay about $340 million in cash for Penford, based in Centennial, Colo., and active in potato starch ingredients. Ingredion expects to fund the transaction with available cash and funds available under existing credit facilities. Seacor Holdings Inc., the owner of approximately 9.34% of Penford’s outstanding common stock, has indicated it supports the transaction, according to Penford. The transaction could close as early as the end of the year, according to Penford.

Ingredion has a strong balance sheet and is generating enough revenue to make further acquisitions possible, Ms. Gordon said.

While known for potato starch ingredients, Penford this year completed an acquisition of Gum Technology Corp., Tucson, Ariz., which now looks to become part of Ingredion.

“We have not done a lot (with) gums and hydrocolloids,” Ms. Gordon said.

Suppliers of hydrocolloids and gums tend to be smaller companies, she said.

“The hydrocolloid/gum area could be a place to build with other acquisitions,” Ms. Gordon said.

The potato starch ingredients in the Penford acquisition will give Ingredion more presence in non-bioengineered ingredients, she said, and other benefits as well.

“It has a higher viscosity,” Ms. Gordon said of potato starch. “So it’s thicker. It gives you greater clarity. So it’s ideal for cheese and dairy and noodles and bakery and coating applications.”

Ingredion previously did not manufacture potato starch, but the company has distributed potato starch from Avebe. The future of that arrangement is yet to be determined.

“We will obviously look at all of our relationships and make sure it makes sense for both parties, but no decisions have been made on that,” Ms. Gordon said.
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