Ingredion Inc., an Illinois company that specializes in nature-based sweeteners and nutrition ingredients, completed its acquisition of Penford Corp., a specialty ingredients company with a facility in Cedar Rapids, company officials announced on Wednesday.
The deal, announced in October, had an aggregate value of $340 million.
Ilene Gordon, Ingredion chairman and CEO, said in a news release that the acquisition of Penford will allow the company to expand its “capabilities to address growing consumer trends.”
“Plus, their complementary portfolio of higher-value specialty ingredients will take us into new and profitable sectors,” Gordon said.
Penford had net sales of $467 million in fiscal year 2013. The company — based in Centennial, Colo., near Denver — has six plants in the United States, all of which make specialty starches.
Penford’s Cedar Rapids facility, 1001 First St. SW, employs 242, according to the Cedar Rapids Metro Economic Alliance. It is the company’s largest facility.
Penford will be incorporated into Ingredion’s $3.1 billion North American business. Tom Malkoski, Penford’s president and CEO, will join Ingredion as a senior adviser on strategic projects to promote specialties growth.
The merger is expected to generate annual cost savings of at least $20 million — primarily from efficiencies in manufacturing, procurement, general and administrative functions, and logistics, Ingredion officials said. But Claire Regan, an Ingredion spokeswoman, said it’s still early to know how the acquisition will effect Penford facilities, including the one in Cedar Rapids.
Ingredion has begun a detailed review, she said.
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Excluding one-time costs, the transaction is expected to be $0.08 to $0.12 accretive to earnings on a per share basis in 2015, according to a company news release.