WESTCHESTER, Ill. (AP) — Ingredion is buying specialty ingredients company Penford Corp. for approximately $340 million.
Ingredion Chairman and CEO Ilene Gordon said in a statement that the transaction will help it establish manufacturing of specialty potato starches in North America. Gordon added that Penford's products will help it address areas that consumers are growing increasingly interested in, such as nutrition and gluten-free eating.
Westchester, Illinois-based Ingredion Inc. said Wednesday that it expects to finance the acquisition with cash on hand and funds available under existing credit facilities.
Centennial, Colorado-based Penford had fiscal 2013 sales totaling $467 million. It has six U.S. plants, with all of them making specialty starches.
Ingredion anticipates the transaction resulting in annual cost savings of at least $20 million. The acquisition is expected to add 10 cents to 15 cents per share to earnings in the first year, excluding one-time costs.
Both companies' boards have approved the deal. It still needs approval from Penford stockholders.
The transaction may close as early as the end of the year.