Acquisition-hungry Finsbury Foods is targeting the UK and Europe for future growth after buying gluten-free specialists Yorkshire Farm Bakery.

As part of the £8.9m deal, the premium cake maker also acquired A & P Foods, which supplies Finsbury and Yorkshire Farm Bakery with gluten-free bread pre-mixes.

Both the businesses are being sold by the Arnett family, who launched the YFB range of gluten-free baked goods under the Livwell brand in 2000 and supply the big four retailers.

The acquisition was a prime opportunity to tap into a market that was set to expand here and abroad, said Dave Brooks, chief executive of Finsbury Foods.

"With more people being diagnosed as wheat intolerant all the time, Mintel research predicts the free-from market, of which gluten-free accounts for about one half, will have doubled to £360m by 2012," said Brooks. "These acquisitions will give us a leading 20% share of the gluten-free market and there is also significant scope to develop a stronger export business as awareness grows in Europe."

Finsbury's previous acquistions of cake makers Anthony Alan Foods and the Lightbody Group last year helped boost like-for-like sales 91% to £82.7m in the six months to December 2007.