Finsbury Food Group Acquires Gluten-free Manufacturer

Specialty bakery Finsbury Food Group has announced it had acquired bakery manufacturer Ultrapharm for an initial GBP17m.

Ultrapharm manufactures an extensive product range of gluten-free breads, buns and rolls and operates in the UK and Poland.

Under the terms of the agreement, Finsbury Food Group is expected to pay GBP17m in cash at completion, up to GBP3m in annual installments until June 30, 2021.

The annual installments would be subject to the continued employment of key management and a final incentive payment subject to performance criteria over the period to June 30, 2021 estimated at about GBP1.0m and capped at GBP5m for regulatory purposes.

The acquisition would be funded from the group’s existing cash and debt facilities. The acquisition of Ultrapharm supports the group’s ongoing strategy to further diversify its product capability into high growth areas, according to a press release.

Ultrapharm generated earnings of GBP1.6m and profit before tax of GBP0.8m last year, which have continued to grow in 2018. The revenue generated was GBP19.5m, up 35% from GBP14.5m for the comparative period in 2016.

“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,” said John Duffy, chief executive of Finsbury Food Group.