Completion of acquisitions and share repurchases
Ingredion (INGR) announced during 3Q15 that it completed the acquisition of Kerr Concentrates—a privately held producer of natural fruit and vegetable concentrates, purees, and essences—for ~$100 million. Ingredion stated that the reason for this agreement is to expand its portfolio of wholesome, clean label solutions to help customers develop products that are trending and in demand.
Ingredion believes that Kerr’s portfolio of value-added ingredients made from fruits and vegetables resonates with its consumers. The Penford acquisition made earlier this year also remains on track. Ingredion seems optimistic about its broadening ingredient portfolio with solutions that consumers are demanding at an increasing rate.
Other plans and strategies
During 3Q15, Ingredion (INGR) also announced that it has plans to consolidate its manufacturing network in Brazil. The consolidation should begin in early 2016 and is expected to be complete by the end of the year. It is expected to result in annual cost savings of $6 million–$8 million starting in 2017. The company anticipates total pre-tax restructuring-related charges of $13 million–$16 million in 3Q15.
Ingredion also announced changes to the structure of the executive leadership team, effective as of January 1, 2016. The company believes that the changes could improve its alignment, leverage opportunities across similar businesses and geographies, and streamline organizational reporting. The company announced its 2016 plans to reduce further its cost structure in South America by consolidating several plants in Brazil.
Its competitors in the industry include ConAgra Foods (CAG), Keurig Green Mountain (GMCR), and Kellogg (K). These companies reported net revenues of $2.7 billion, $969.5 million, and $3.5 billion, respectively, in the last reported quarter. The Guggenheim S&P 500 Pure Growth ETF (RPG) and the First Trust NASDAQ 100 Equal Weighted ETF (QQEW) invest 0.78% and 0.58%, respectively, of their portfolios in Keurig Green Mountain stock.