Tate & Lyle (1K) | Hold | Acquisition by Ingredion

Research evidence excerpt

Tate & Lyle (1K) | Hold | Acquisition by Ingredion

Tate & Lyle Hold | Target Price: 595p

Company description Management

Tate & Lyle is a North American-focused provider of ingredients and solutions to Nick Hampton, CEO

food and beverage companies, with a strong heritage in corn-derived products. It Sarah Kuijlaars, CFO

has a strong franchise in the area of sugar and calorie reduction and operates David Hearn, Chairman

through two business units: a Food & Beverage Solutions unit focusing on low-

sugar and high-fibre products, and Sucralose. In 2024, the company completed Key shareholders

the exit from its low growth and margin Primary Products unit and bought CP Free float 83.00% Huber 16.80%

Kelco for USD1.8bn. Ameriprise 5.50%

Vanguard 5.30%

Investment case Valuation methodology

Organic growth acceleration. We set the TP at the offer price of 595p

Deliver the synergies following the merger with CP Kelco and Risks to our rating

growth the EBITDA margin. The rerating may take much longer than we anticipate or not

Take out bid by Ingredion. occur at all.

Catalysts Cost inflation is affecting T&L at multiple levels. Although the

Reporting good and consistent organic growth as a new group has been successful in offsetting cost inflation in 2021-22

company. and the CEO seems quite confident about the company’s ability

Increasing understanding of prospects for new company. to raise prices, we cannot rule out a scenario in which such price

Delivery of the cost savings and top-line synergies related to the increases might not fully materialise.

CPK deal. A weak US dollar, with every one-cent change in the US dollar

having a GBP1-1.5m impact on PBT.

Key data charts

Price performance Sales split by region Sales split by division

SWOT analysis

Strengths Weaknesses