Turpaz Industries takes majority stake in Sunspray Solutions

Turpaz Industries agreed on 15 December 2023 to acquire 55% of Sunspray Solutions from the South African private equity funds holding it, for 14.2 million dollars, or 269.6 million rand, funded by bank borrowing. Completion was expected in the first quarter of 2024. The price carried an adjustment tied to the company’s EBITDA over 2024 and 2025, capped at around 2.8 million dollars, together with a further payment keyed to average EBITDA across 2023 to 2025 above an agreed threshold. Cross options over the remaining 45% become exercisable from January 2027, at a price based on performance over the preceding twelve quarters. Operating since 1944, Sunspray manufactures powdered food ingredients by spray drying, a process that turns liquids into powders by atomising them into hot air. It produces several hundred natural and synthetic preparations to customer specification, for meat products, bakery, snacks, seasonings, drinks, sauces, dairy and animal feed. Two plants with development laboratories house eight spray drying towers, and the company employs 265 people. Revenue amounted to $26.6m in 2022 with an adjusted EBITDA of $5.2m, against 25.1 million dollars and 4.8 million the previous year, and net debt stood at 6.6 million dollars in June 2023. Spray drying is capital-intensive and specialised. A tower costs millions to install and must be configured for the product passing through it, since the drying temperature and droplet size determine whether a powder dissolves correctly or degrades. Customers qualify a supplier’s towers for their formulations and rarely move afterwards. The purchase took Turpaz into Africa for the first time and added a manufacturing capability its European operations did not hold. Chief executive Rene Cross, in post since 2018, remained at the head of the business and joined the group’s management.

The acquisition of Sunspray Solutions is part of the growth strategy of Turpaz Industries, which already has several external growth operations under its belt, notably Food Base in 2023.