Expanding Production: U.S. Sugar to Better Serve Customers

Clint Thompson Florida, Sugar, Top Posts

U.S. Sugar sign at the mill

Acquisition of Imperial Sugar provides U.S. Sugar’s and Imperial Sugar’s customers with increased production and distribution, a full suite of sugar products, and a more secure sugar supply

CLEWISTON, FLORIDA — An acquisition on Wednesday by U.S. Sugar returns Imperial Sugar to All-American owernship.

U.S. Sugar announced on Wednesday it has reached an agreement with Louis Dreyfus Company to acquire the business and assets of Imperial Sugar Company, which is a port refiner with operations in Georgia and Kentucky.

“We are excited to combine our operations with Imperial Sugar’s port refinery, consumer brands, and sugar processing capabilities,” said Robert H. Buker, Jr., President and CEO of U.S. Sugar. “Together, U.S. Sugar and Imperial Sugar will provide our customers with a more dependable, secure supply of sugar.”

“Imperial Sugar has a strong heritage as a family-owned business and could not be more proud to become part of the U.S. Sugar family,” said Mike Gorrell, CEO of Imperial Sugar. “This move will increase production and reduce costs at Imperial Sugar’s refinery, generating significant efficiencies that ultimately will benefit our customers.”

Imperial Sugar currently operates a refinery at Port Wentworth in Savannah, Georgia and a sugar transfer and liquification facility in Ludlow, Kentucky. The company primarily sources its raw sugar from Central and South America, and the Caribbean. Imperial Sugar’s various facilities, consumer brands and raw/refined sugar inventories will be included in the purchase.

“U.S. Sugar has a world-class sugar business focused solely in America, including a historic relationship with the Savannah refinery,” said Adrian Isman, Head of the North American Region at Louis Dreyfus Company. “Imperial Sugar’s port refining capabilities will be an excellent addition for the company, while enabling LDC to concentrate more fully on its global sugar merchandizing business.”

Prior to building its Clewiston refinery in 1998, U.S. Sugar sold and shipped its raw sugar to the Savannah refinery it is now acquiring for decades. The company sustainably farms more than 200,000 acres of sugarcane in South Florida and also owns and operates a short-line railroad, the South Central Florida Express, which facilitates shipping sugar products.

Acquisition to Expand Sugar Production, Increase Sugar Supply Security, Create Logistics and Shipping Synergies, and Improve Competition—All Which Will Ultimately Benefit American Customers and Farmers

  • Expand Sugar Production and Reduce Costs: U.S. Sugar will invest in Imperial’s refinery to expand production and reduce manufacturing costs. Adding Imperial’s facility will provide U.S. Sugar and its local Florida farmers with enough refining capacity to utilize all the sugarcane they farm.
  • Increase Domestic Sugar Supply Security: Increased production capacity and access to Imperial’s Savannah port refinery will supplement U.S. Sugar’s marketing cooperative’s sugar supply if supplies of domestic beet and cane crops are limited from freezes or hurricanes.
  • Create Logistics and Shipping Synergies: Adding Imperial Sugar’s operations to U.S. Sugar’s marketing cooperative will create substantial distribution synergies and cost savings that will benefit customers.
  • Improve Competition: The new combined company will be a better competitor, offering customers a full suite of sugar products (which U.S. Sugar does not supply today) and expanding distribution capabilities throughout the country. U.S. Sugar will continue to compete across the U.S. with both domestic and imported sugar refiners, along with independent resellers and distributors.

The transaction, expected to close in 2021, is subject to review under the Hart-Scott-Rodino Antitrust Improvements Act and other customary conditions. Wells Fargo Securities, LLC is serving as the exclusive financial advisor to U.S. Sugar. The transaction will be financed through committed debt financing provided by Wells Fargo Bank, N.A. and PGIM Agricultural Finance.