Finsbury Food Group Acquires Gluten Free Bakery
Finsbury Food Group, a leading UK speciality bakery manufacturer of cake, bread and morning goods for both the retail and ‘out of home eating’ foodservice channels, has acquired Ultrapharm, a ‘free from’ bakery manufacturer, for £17 million. The acquisition of Ultrapharm supports the Finsbury Food Group’s ongoing strategy to further diversify its product capability into high growth areas.
Established in 1993, Ultrapharm employs more than 240 staff across manufacturing sites in the UK and Poland. As a specialist ‘free from’ bakery, the business has an extensive product range including bread, buns, rolls and other morning goods. Ultrapharm has a diverse customer base with long term blue-chip customers, including Finsbury itself, where it supplies free from products to Lightbody Europe. The opportunity to invest in the acquired sites and to expand the group’s existing facilities to manufacture free from products, a category of which the group has previous expertise, provides significant upside sales potential to Finsbury in a growing segment.
As demand for free from products has expanded from dietary requirement to a lifestyle choice, the UK free from bread and morning goods market has grown 92% over the last four years with the outlook set for further growth over the next five years in line with the continued growth forecast for the wider UK free from grocery market . In EMEA, the gluten free bakery market is forecast to grow at a CAGR of 10.6% over the period 2017-21.
For the year ended 31 December 2017, Ultrapharm generated EBITDA of £1.6 million and profit before tax of £0.8 million which have continued to grow since year end. Revenue generated was £19.5 million, up 35% from £14.5 million for the comparative period in 2016. As at period end, gross assets were £10.8 million. The acquisition will be earnings accretive immediately post completion.
John Duffy, chief executive of Finsbury Food Group, comments: “We are delighted to have secured such a valuable strategic acquisition, one that presents the group with a significant opportunity to access an exciting and high growth marketplace. Ultrapharm has a robust market position both in the UK and Europe, extensive technical ability and strong relationships across a high quality and diverse customer base. This provides Finsbury with the opportunity to build upon both businesses existing retail relationships, as well as unlocking further commercial opportunities.”
