Penford Corporation (NASDAQ: PENX) announced that on January 11, 2012, it completed the acquisition of the businesses operated by Carolina Starches, LLC and a related entity, Keystone Starches, LLC. These businesses are generally known as Carolina Starches.
Carolina Starches produces and sells modified starches and starch blends domestically and in several export markets, generating approximately $25 million in annual revenue.
“The addition of Carolina Starches offers strategic and operational benefits to both our specialty industrial products and food ingredients businesses,” said Tom Malkoski, CEO of Penford Corporation. “This acquisition should result in enhanced customer service and technical support, as well as broaden our portfolio of modified starches, and lead to improvements in our supply chain functions.”
Also on January 11, 2012, Penford entered into stock option agreements with R. Bentley Cheatham, Dwight L. Carlson and Steven P. Brower, the former owners of Carolina Starches. Pursuant to these agreements, Penford granted each such individual options to purchase up to 27,500 shares of the Company’s common stock, $1.00 par value per share, at an exercise price equal to the closing price as of the close of business on January 11, 2012. Each grant was approved by a majority of the Company’s independent directors, and was granted as an inducement material to each recipient’s entering into employment with a subsidiary of the Company in accordance with Nasdaq Listing Rule 5635(c)(4). Pursuant to the terms of the stock option agreements, the options have a term of seven years and will vest over a two year period, with one-half of the options vesting on the first anniversary of the grant date and the remainder becoming vested on the second anniversary of the grant date, provided that the recipient has not been terminated by the Company for cause or resigned by such date. The vesting of these options will accelerate and the award will become exercisable in full immediately prior to a change of control.