WESTCHESTER, Ill. - Ingredion (NYSE:INGR) Incorporated (NYSE: INGR), a global provider of ingredient solutions, has completed the divestiture of its South Korean operations to an affiliate of Sajo Group, a major Seoul-based food company. The transaction, which was finalized on Thursday, involves a total consideration of approximately $294 million.
The company received $247 million net of transaction costs on the closing date, with the remaining balance to be paid over the next three years. Initially announced on November 13, 2023, the sale is part of Ingredion's strategic reorganization to streamline its portfolio and reallocate resources to areas expected to generate increased shareholder value.
Ingredion's South Korean business reported unaudited net sales of $325 million for the full-year 2023. According to Jim Zallie, Ingredion's president and chief executive officer, this divestment represents a significant step in the company's ongoing transformation journey, aiming to concentrate on growth sectors and support its long-term strategic vision.
The company will collaborate with the Sajo Group to facilitate a smooth transition for employees, customers, and other stakeholders affected by the sale.
Ingredion, headquartered near Chicago, operates in over 120 countries and reported nearly $8 billion in net sales for 2022. The company focuses on converting various plant-based materials into value-added ingredients for multiple industries, including food, beverage, animal nutrition, brewing, and industrial markets.
InvestingPro Insights
As Ingredion Incorporated (NYSE: INGR) continues to refine its strategic direction with the recent divestiture of its South Korean operations, investors may find value in considering the company's current financial health and market performance. Ingredion boasts a solid track record of dividend reliability, having raised its dividend for 13 consecutive years, and has maintained these payments for an impressive 26 years. This commitment to shareholder returns is complemented by the company’s sound financials, with a market capitalization of $7.22 billion and a robust revenue growth of 6.64% over the last twelve months as of Q3 2023.
An attractive aspect for value investors is Ingredion's low price-to-earnings (P/E) ratio, which stands at 11.59, indicating the stock may be undervalued relative to its near-term earnings growth potential. Moreover, the company's PEG ratio, which measures the P/E relative to earnings growth, is at a mere 0.28, further highlighting the potential for growth at a reasonable price. Analysts have taken note of this, with three analysts revising their earnings upwards for the upcoming period.
InvestingPro subscribers have access to additional insights, including the fact that Ingredion's liquid assets exceed its short-term obligations, and the company is trading near its 52-week high, signaling strong market confidence. With the New Year sale, subscribers can now enjoy a discount of up to 50% on an InvestingPro subscription. To further enhance the value, use coupon code SFY24 to get an additional 10% off a 2-year InvestingPro+ subscription, or SFY241 to get an additional 10% off a 1-year InvestingPro+ subscription. For a comprehensive analysis and more InvestingPro Tips, such as the company's strong return over the last three months and predictions of profitability for this year, visit https://www.investing.com/pro/INGR.
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