UK bakery business Finsbury Food Group is to acquire free-from producer Ultrapharm.
In a notice posted with the London Stock Exchange, Finsbury said it would pay GBP17m (US$21.9m) in cash upon completion, a further GBP3m up until June 2021 “subject to the continued employment of key management” and a final incentive payment subject to performance criteria” over the period estimated at around GBP1m.
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Ultrapharm has manufacturing facilities in the UK and Poland, and generated GBP19.5m in revenues for the year ended in December. The company produces gluten-free bread, buns, rolls and other “morning goods” to “long-term blue-chip customers”, including Finsbury itself.
John Duffy, chief executive of Finsbury, 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.”
Five years ago, Finsbury sold its free-from business United Central Bakeries to UK gluten-free specialist Genius Foods in a deal worth GBP21m (then $31.8m).
Duffy added: “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.”
Founded in 1993, Ultrapharm posted EBITDA of GBP1.6m last year and profit before tax of GBP0.8m. Its assets are valued at GBP10.8m.
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By GlobalDataFinsbury said the UK free-from bread and morning goods market has grown 92% over the last four years, according to data from Kantar. Citing figures from Technavio, it added the gluten-free bakery market in EMEA is forecast to grow at a CAGR of 10.6% over the period 2017-2021.
