Gluten-free brand Genius has revealed ambitious expansion plans after acquiring Finsbury Food’s free-from operation in a £21m deal.

The Edinburgh company will invest in manufacturing capacity and is set to expand its product range into cakes and sandwich alternatives following the acquisition, which includes the Livwell bakery in Hull, and the United Central Bakeries site in Bathgate, Scotland, where the first loaf of Genius bread was produced in 2009.

In addition to taking on Finsbury’s own-label free-from custom, which includes major supermarket contracts, Genius will gain control of the Livwell brand, which is primarily available to coeliacs on prescription.

Genius Foods, whose branded range includes loaves and croissants, also supplies foodservice. Its annual turnover was £12.1m in 2011, and the company expects the deal to help this grow from an estimated £20m in 2012 to £50m this year.

Genius also has a growing export business, including listings with 2,500 Walmart stores in the US and 320 Carrefour in Spain, and is set to extend this in the near future. With the exception of the US business, all Genius products are manufactured at the UCB and Livwell sites.

“Owning our own manufacturing facilities will allow us to invest in NPD and stretch into other categories,” said CEO Roz Cuschieri. With capacity at Hull and Bathgate already “pretty full”, Genius would invest in the sites soon to increase flexibility and output, she added.

Finsbury, which makes celebration cakes, bread and morning goods, said selling the free-from operation would allow it to grow its core business and develop its licensed portfolio. As The Grocer went to press, Finsbury’s share price was up 17%.