Finsbury Food Group, the Hamilton-based speciality bakery manufacturer of cake, bread and morning goods, has continued its international growth with the £17 million acquisition of Ultrapharm, a ‘Free From’ bakery manufacturer.
John Duffy, chief executive of Finsbury Food Group, said: “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.
“Alongside the growth opportunities this acquisition brings, in line with the Group’s strategy, it further diversifies us by geography and category; giving us a further foothold in Europe and allowing us to diversify into the Free From market.”
“We look forward to welcoming Ultrapharm to the team and investing in the wider Group to capitalise on such a significant opportunity for growth.”
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 a product range including bread, buns & rolls and other morning goods. Ultrapharm has a diverse customer base with 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 the Group in a growing segment.
For the year ended 31 December 2017, Ultrapharm generated EBITDA of £1.6 million and profit before tax of £800,00 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 total consideration payable is split with £17 million payable in cash at completion, up to £3 million payable in annual instalments to the period to 30 June 2021 subject to the continued employment of key management and a final incentive payment subject to performance criteria over the period to 30 June 2021 estimated at approximately £1 million and capped at £5 million for regulatory purposes. The consideration will be funded from the Group’s existing cash and debt facilities.
Marc Lewis, Chief Executive of Ultrapharm, said: “We are delighted to be joining the Finsbury Group and looking forward to growing Ultrapharm’s exciting prospects with their support.”
Last year Finsbury Food Group said it was closing its Grain D’Or factory with the loss of around 250 jobs