Ingredion Corp., an ingredient manufacturer sealed the deal with Penford Corp in an effort to expand its specialty food ingredients with the addition of potato starches in an all-cash deal amounting to a total of $340 million.
Ingredion agreed to pay $19 per share of the company, a 73 percent premium compared to the closing share price on Oct. 14., according to an official statement released by Penford in Bloomberg.
Aside from that, Westchester, Illinois-based Ingredion claimed that the deal will boost its revenues to about 15 cents per share in the first fiscal year, minus the cost of the acquisition.
"Penford's range of products addresses growing consumer trends, including nutrition, gluten-free, food textures, and sustainable green solutions," Ilene Gordon, chairman and chief executive officer of Ingredion said in a statement in Bloomberg.
Meanwhile, Ingredion changed the company's name from Corn Products International Inc. back in 2012 to signal their transformation of expanding beyond corn syrup production.
Ingredion Chief Execuitve Ilene Gordon stressed how the deal would benefit the company's plans for expansion of specialty potato starches aside from its already hustling production of environmentally friendly, nutritious and gluten-free food ingredients.
On a side note, Seacor Holdings, which currently holds 9.3 percent stake of Penford, also green lighted the deal.
"As a long-term shareholder of Penford, Seacor believed Penford was undervalued, and is pleased that management has responded by taking a step we believe is in the best interests of all shareholders by entering into this transaction with Ingredion," said Seacor executive and Penford director Evan Behrens.
Penford, which shares were reported to have been declining over the past month, as it went down 25 percent last Sept., currently runs six U.S. plants making specialty starches.
After the deal was announced, Penford jumped 71 percent to $18.75 at 9:39 a.m. in New York while Ingredion went down 1.9 percent tp $70.63.
