W&R Barnett to buy Tate & Lyle molasses business
December 1, 2010
by Eric Schroeder
LONDON — W&R Barnett Ltd., northern Ireland’s largest international grain trader, has agreed to acquire the molasses business of Tate & Lyle P.L.C. for £67 million ($104 million) in cash, subject to closing adjustments for net cash and working capital. Tate & Lyle said it plans to use proceeds from the sale to reduce its net debt.
According to Tate & Lyle, the molasses businesses had external sales of £228 million and made an operating profit of £13 million in the year ended March 31, 2010, and had gross assets of £81 million at that date.
The move comes two months after Tate & Lyle completed the sale of its E.U. sugar refining operations to American Sugar Refining. At the time the sugar refining sale was first announced in July, Tate & Lyle disclosed its intent to sell the remaining businesses within its sugars division, including molasses and Vietnamese sugar. While the sale of molasses was announced No. 25, the sale of the Vietnamese sugar business is progressing to plan, Tate & Lyle said.
“Tate & Lyle’s clear priority is to grow its Speciality Food Ingredients business, supported by cash generated from Bulk Ingredients,” said Javed Ahmed, chief executive officer of Tate & Lyle. “This disposal represents another important step as we focus, fix and grow our business.”
Earlier this month, W&R Barnett reached agreement with Origin Enterprises P.L.C. to establish an all-Ireland grain and feed handling, logistics and trading business.