Finsbury Foods is selling its free-from business to gluten-free bread brand Genius for £21m.
The company, producer of celebration cakes and bread and morning goods, said the move would allow it to continue to grow its core business and further develop its licensed portfolio while taking advantage of bolt-on acquisitions.
Finsbury’s free-from division manufactures free-from products for own-label ranges and the Genius brand, which has grown to be worth £11.9m in annual retail sales [Nielsen 52 w/e 13 October 2012] since launching in 2009. Finsbury has produced free-from goods since acquiring United Central Bakeries in 2005 and Livwell in 2008.
Two years ago, Finsbury entered into a joint venture arrangement with Genius Foods that gave the brand an option to buy the free-from business, which achieved total sales of £28.5m for the year ended June 2012, with profit before tax of £0.6m.
Finsbury, which raised £3.9m in a share issue in November, reported sales up 1.3% to £103m in its half-year results in January.
“We believe our decision to focus on our core cake and bread business is the group putting its best foot forward,” said Finsbury CEO John Duffy. “The sale will allow the group to further invest, pay down debt, and take advantage of additional opportunities available to us.”
Genius is paying £17.7m to Finsbury on completion of the deal, with a further £3m payable on the second anniversary of completion.