Ingredion to buy TIC Gums

by Jeff Gelski
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TIC Gums protein powder
Ingredion will pay $400 million for the maker of agriculturally derived, gum-based texturizers.

WESTCHESTER, ILL. — Ingredion, Inc. will expand in texture systems again as the company has entered into a stock purchase agreement to acquire all of the outstanding shares of TIC Gums, Inc. Ingredion expects to fund the $400 million transaction with available cash and short-term credit.

TIC Gums, White Marsh, Md., is a privately held company that provides texture systems to the food and beverage industry. The company has access to a variety of agriculturally derived ingredients, including acacia gum and guar gum. The nature-based ingredients from TIC Gums form the foundation for texture systems that allow for clean label reformulation, according to Westchester-based Ingredion.

Ilene Gordon, Ingredion
Ilene Gordon, chairman and c.e.o. for Ingredion

“As a leader in texture systems for decades, TIC Gums has grown significantly over the past several years through its deep R.&D. expertise and a differentiated and focused approach to the customer experience,” said Ilene Gordon, chairman and chief executive officer for Ingredion, when the deal was announced Dec. 20. “The team has an excellent track record in developing and delivering proprietary, customized systems. This acquisition propels us into a new era of on-trend texture development with even more solutions for organic and clean-label demands.”

The planned TIC Gums’ acquisition will follow Ingredion’s purchase of Penford Corp. for about $340 million, which was completed in March 2015. Penford offered customized combinations of texture ingredients with a particular emphasis on potato starches.

TIC Gums facility
TIC Gums operates a production facility in the United States and another one in China.

TIC Gums, which employs more than 200 people, operates a production facility in the United States and another one in China. Ingredion’s board of directors and the stockholders of TIC Gums already have approved the acquisition, which is expected to close by the end of 2016. Ingredion expects the transaction, excluding one-time costs, to be 4c to 5c accretive to adjusted earnings per share in the first year.

TIC Gums was founded in 1909 as the Tragacanth Importing Co. In the 1940s the company began focusing exclusively on water-soluble gums, emphasizing food and pharmaceutical uses. A manufacturing facility in Guangzhou, China, opened in 2014.

Ingredion turns corn, tapioca, potatoes and other vegetables and fruits into value-added ingredients. The company has customers in more than 100 countries.

Greg Andon, TIC Gums
Gregory Andon, president of TIC Gums

“TIC Gums’ and Ingredion’s strengths complement each other perfectly,” said Gregory Andon, president of TIC Gums. “We share a vision around the importance of texture and stabilization in food and beverage formulation. By coming together, we will truly be able to focus on the correct technical solutions for our customers, whether they be starch, gum or systems containing both.

“Ingredion’s global footprint will enable us to achieve our geographical expansion goals much faster than we otherwise could on our own. We believe our business model strength in clean label formulation with the most dynamic players in the food and beverage space has significant untapped potential on the global stage.” 
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