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Westchester's Ingredion to buy Penford for $340 million

Westchester-based Ingredion Inc., a maker of high-fructose corn syrup, agreed to buy Penford Corp. for about $340 million in cash to add potato starches to its range of specialty food ingredients.

Ingredion will pay $19 a share, 73 percent more than the closing share price yesterday, Centennial, Colorado-based Penford said today in a statement. Ingredion said separately the deal will increase its earnings by as much as 15 cents a share in the first year, excluding acquisition costs.

Ingredion changed its name from Corn Products International Inc. in 2012 to reflect its efforts to extend beyond corn syrup. Today's deal is the company's biggest since 2010, when it bought National Starch & Chemical Co. for $1.3 billion.

"Penford's range of products addresses growing consumer trends, including nutrition, gluten-free, food textures, and sustainable green solutions," Ilene Gordon, chairman and chief executive officer of Ingredion, said a statement.

Penford operates six U.S. plants that make specialty starches. Seacor Holdings Inc., a holder of a 9.3 percent stake in the company, agreed to vote in favor of the deal and not solicit proxies from other investors for its director nominees, the company said. Seacor said in July it intended to nominate four directors to the Penford board.

Ingredion expects to fund the purchase with available cash and credit facilities, and the transaction may close this year. It's paying about seven times Penford's earnings before interest, taxes, depreciation and amortization, adjusted for cost savings, according to Ingredion.

Penford rose 71 percent to $18.75 at 9:39 a.m. in New York while Ingredion fell 1.9 percent to $70.63.

JPMorgan Chase & Co. is financial adviser to Ingredion on the deal and Sidley Austin LLP is its legal adviser. Deutsche Bank AG and Perkins Coie LLP advised Penford.

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