Warburtons has snapped up speciality bread and pastry manufacturer Giles Foods in its first acquisition for 20 years.

The deal, for an undisclosed sum, gives Warburtons access to a number of new categories and a foothold in the restaurant and café trade.

Giles Foods supplies a range of 137 unbranded bakery products – from garlic breads and dough balls through to Danish pastries and tarts. The £26m turnover business counts Morrisons as its biggest customer and it also sells to big names in foodservice including Wetherspoon’s and Whitbread.

“They have a skill set that we don’t have – to make products like pastries, tarts and croissants. It would have taken five or 10 years to do it ourselves,” said Warburtons chairman Jonathan Warburton. 

Warburtons said the acquisition fitted its strategy of diversification within bakery. Faced with a long term decline in sales of sliced bread, the family-owned baker has moved into new categories such as snacks and free-from bread in recent years.

“The core bread business remains our primary focus, but there is stage when you need to grow into new areas. Baked snacks are one string to that bow, so is free-from, and Giles allows us to short circuit our entrance into another,” said Warburton. 

Giles Foods, which employs 300 people across two sites in Milton Keynes and Warminster, will operate as a stand-alone business headed by the existing management team, fronted by managing director David Rixon.

“We are confident that becoming part of the Warburtons business will allow what Giles Foods has done for 35 years to evolve and grow,” said Rixon.

Although Giles Foods will operate as a separate business, it will start working straight away with Warburtons to realise cost savings in procurement.

And Warburton said once the dust settled on the deal, it would look to bring out Warburtons branded products in some of the categories that Giles Foods operates in. “I definitely see potential for the Warburtons brand – that is very important,” he said.

It is the first acquisition Warburtons has made since it bought Sayers in 1990. Warburtons was advised by KPMG and DLA Piper, and Giles by Deloitte.