Finsbury Foods has announced the acquisition of Yorkshire Farm Bakery (YFB) and A&P Foods for GBP8.9m (US17.68m).

Yorkshire Farm, which produces gluten free breads, and A&P Foods, which produces gluten-free pre-mixes for YFB, both share the same site.

The acquisition of the two companies was made from the Arnett family, three of whom will remain with the business.

"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," said Dave Brooks, Finsbury Food Group chief executive. "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."

The acquisition is designed to complement the group's health businesses - an area where it has already experienced strong growth and foresees further significant potential.

Finsbury has created a new trading company, Livwell Ltd, to complete the acquisition of the assets and undertaking of YFB and A&P.

An amount of GBP4.8m is payable on completion, with the remainder payable in stage payments.

Combined YFB and A&P sales in the year ended March 2007 were GBP7.30m, with forecast sales for the year to March 2008 predicted at GBP8.50m.