Sugar Land, Texas, Jul. 15 - Imperial Sugar Company today announced that it has increased its ownership stake in Wholesome Sweeteners, Incorporated, and also acquired an option to purchase the remaining equity interest. Wholesome, an organic and natural sweetener company based in Sugar Land, Texas, was formed as a venture in 2001 between Imperial Sugar and Edward Billington & Son, a diversified agriculture and food company based in the United Kingdom.
Under the terms of the agreement, Imperial paid $4.0 million in cash to purchase 5% of Wholesome’s common stock from Billington, increasing Imperial’s ownership position from 45% to 50%. The $4.0 million investment also includes an option to acquire the remaining 50% interest owned by Billington and is exercisable between September 1, 2010 and May 31, 2011, at an agreed multiple of future earnings.
“This is an excellent investment that fits very well with our overall strategy to enter new businesses, expand channels of distribution, develop innovative products, and pursue new avenues of growth beyond our core business,” said John Sheptor, President and CEO of Imperial Sugar Company. “We believe Wholesome Sweeteners is the leading organic sugar company in the United States and provides an excellent foundation for us to grow our natural and organic portfolio.”
Nigel Willerton, CEO of Wholesome Sweeteners, also welcomed the development as an exciting opportunity to partner even more closely with Imperial Sugar. “We have built a strong market leading position in North America through delivering the highest quality products that meet the consumer demand for socially responsible and environmentally sustainable farming practices. Imperial Sugar will provide a platform to translate our leadership in the natural and organic channel to the mainstream retail environment, as well as the additional resources to support innovation and new product development.”
According to the Organic Trade Association, organic food is one of the fastest growing product groups within the food industry with sales growing 15%-20% annually. This growth reflects an increasing trend among consumers to adopt organic and natural items into their daily food and beverage diets.
“Wholesome Sweeteners’ sales performance has been impressive, generating a compound annual growth rate in excess of 30% for the last three years, and rising to the $43 million level in 2007. The company’s leadership position in the industry and continual product innovations should enable it to capture rising product sales in the expanding organic and natural sweetener channels providing enhanced margins relative to our traditional refined sugar processing and marketing business,” added Sheptor.
Wholesome Sweeteners is a pioneer in Fair Trade Certified™ organic and natural sugars, molasses and honey, bringing the first Fair Trade Certified sweeteners to North America. Recently, the company also introduced the first Fair Trade Certified organic honey products, which will be available through distribution channels in August.