Finsbury Food Group Sells Free From Business For £21 Million
Finsbury Food Group, a leading UK manufacturer of cake, bread and bakery goods, has sold its Free From business for a total value of approximately £21 million to Genius Foods, the Edinburgh-based gluten-free food specialist. The disposal will allow Finsbury to focus on its core cake and bread businesses.
The Free From business consists of two subsidiaries, Livwell and United Bakeries (the holding company of United Central Bakeries), which account for 14% of Finsbury’s group revenues.
Through Livwell and UBH, Finsbury has been a producer of Free From bakery and other morning goods products since it acquired UCB in November 2005 for £2.7 million and Livwell in April 2008 for £9.6 million. In December 2010, Finsbury entered in to a joint venture arrangements with Genius in respect of fresh gluten-free bread and an additional range of gluten-free products to be sold under the Genius brand. UCB and Livwell produce Finsbury’s gluten-free products as well as yum yums and potato scones. The Free From companies achieved total sales of £28.5 million for the year ended June 2012 and annual profit before tax of £0.6 million. The value of the net assets of the Free From business was £6.1 million on 29 December 2012.
The sale will transform Finsbury’s balance sheet with a cash balance of approximately £17.7 million paid to the group on completion, and a further £3 million payable by the second anniversary of completion. This will allow Finsbury to concentrate on growing its cake and bread businesses, to further develop its licensed brand portfolio, and to take advantage of the right bolt on acquisitions to drive longer term value. In addition to the investment in its current businesses, the group will also continue to pay down its outstanding debts.
John Duffy, chief executive of Finsbury Food Group, comments: “We believe that our decision to focus on our core cake and bread business is the group putting its best foot forward. The sale will allow the group to further invest, pay down debt, and take advantage of additional opportunities available to us, with the ultimate goal of driving shareholder value.”
