Lees Foods, the UK-listed confectionery and baked goods group, has acquired specialty desserts and cakes producer Patisserie UK for GBP2.5m (US$5.1m).
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The transaction comprises an initial cash payment of GBP1.85m and the issue of 65,000 new ordinary shares in Lees Foods.
In addition, there is a deferred cash consideration of GBP450,000, payable in two tranches of up to GBP250,000 and up to GBP200,000, dependent upon the level of profit over the next two years.
Patisserie UK is to retain its trading identity within the Lees Foods group, with Johnnie Roden continuing as managing director.
Lees said Roden would join its board after six months, at which time he will be granted options over 30,000 new ordinary shares in Lees Foods under a non-approved option scheme.
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By GlobalData“This is our first acquisition since joining AIM and it represents an exciting investment for Lees Foods,” said Lees Foods executive chairman Raymond Miquel. “Patisserie UK produces a range of high-quality bakery goods and premium cakes which will be an excellent addition to our portfolio, especially in the food service and catering sectors.”
Miquel added that Lees planned to to expand Patisserie UK’s Livingston factory to increase production capacity. “Patisserie UK’s products will be introduced into Lees Foods’ existing distribution channels as they complement our existing product range and provide significant new sales opportunities for the Lees Foods group,” Miquel said.
Patisserie UK, which like Lees is based in Scotland, is the trading arm of Rock Cake Ltd. Created in 2006 through a management buyout from Enterprise Foods, it supplies specialty baked goods and desserts to out-of-home channels including coffee chains, hotels, restaurants, and travel and contract catering outlets.
It employs 50 people, and recorded a pre-tax profit of GBP420,000 in the year to 30 June on sales of GBP3.5m.
