Bread makers bought by industry giant
A MANUFACTURER of gluten free breads has been acquired by cake maker Finsbury Food Group.
Finsbury, which also makes bread and is the number two player in the UK cake industry, has bought Yorkshire Farm Bakery (YFB) as well as A & P Foods, which trades from the same site.
YFB, based in Hull, was established in 1983 as a general wholesale bakery.In 2000, the business entered the gluten free market and has developed into a dedicated gluten free site.
A & P, which has been trading since 2005, produces gluten free pre-mixes for YFB as well as United Central Bakeries (UCB), which is part of the existing Finsbury Group.
The businesses have been acquired for £8.9m, of which £4.8m is payable on completion, with the remainder payable in stages.
Both acquired businesses have been purchased from the Arnett family. Three of the family will remain with the business following the deals.
The two businesses employ more than 100 people. Their sales are mainly focussed on the UK's major supermarkets, which generates more than two thirds of total sales.
Combined YFB and A & P sales for the year ended March 31, 2007 were £7.3m. Forecasted sales for the year to March 31, 2008 are at least £8.5m.
Finsbury, which has its head office in London, has created a new trading company, Livwell, to complete the acquisition of the assets and undertaking of YFB and A & P. The initial payment for the two companies is being funded by a commercial mortgage of £0.8m and a £4m loan provided by HSBC.
Finsbury said the acquisitions complemented its health sector, which it believes is protected from a downturn in the economy, and would be earnings enhancing during its first full year of ownership.
Dave Brooks, Finsbury's chief executive, said: “Finsbury Food Group is delighted to welcome the Arnett family and their businesses into the group. Our trading relationship goes back to late 2005 when the group acquired UCB, and we look forward to continuing our growth together.
“The UK retail market offers huge scope for growth as more and more consumers choose a wheat free diet, and the UK medical prescription market, which is twice the size of the retail market, brings new opportunity. There is also significant scope to develop a stronger export business as awareness grows in Europe.
“These businesses perfectly fit our acquisition criteria, and their acquisition is further evidence of our group's confidence in our market positioning and trading performance.”
Tony Arnett, of YFB, said: “Over the last five years, our growth in the free from market has been significant, and during 2007 the family came to the view that it was time for the business to be grown within a larger concern to ensure the potential we had created was fully developed.
“Our team in Hull have been fantastic work colleagues over those years and we now look forward to the next exciting phase of Livwell with Finsbury.”
