Tate & Lyle to acquire dietary fibre business in China

London, UK, 31 March 2022 - Tate & Lyle, a leading supplier of food and beverage ingredients, said it has signed an agreement to acquire Chinese prebiotic dietary fibre business Quantum Hi-Tech (Guangdong) Biological Co. for $237 million (£180.6m).

London-headquartered Tate & Lyle added that the acquisition significantly strengthens its 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.

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 per cent of the global dietary fibres market which is forecast to grow at around 6 per cent per annum.

“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,” Nick Hampton, chief executive at Tate & Lyle, said.

The acquisition will expand 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.

For the 11 months ended 30 November 2021, Quantum generated revenue of $46 million and EBITDA of $14 million. The acquisition is expected to be accretive to revenue growth and EBITDA margin for Tate & Lyle in the first year of ownership.

The deal is expected to be completed in the second quarter of 2022.