Finsbury Food completes sale of free-from bakery business to Genius Foods

UK-based Finsbury Food has completed the sale of its free-from bakery business to Scottish firm Genius Foods in a deal worth £21m, as part of its strategy to focus on its core cake and bread businesses.

Finsbury’s free-from business comprises two subsidiaries, Livwell and United Bakeries (UBH), which account for 14% of the company’s annual revenue.

In addition to Finsbury’s gluten-free products, UCB and Livwell produce yum yums and potato scones.

Livwell and UBH posted total sales of £28.5m for the year ending June 2012 and annual profit before tax of £0.6m, and the value of their net assets is £6.1m as of 29 December 2012.

Under the terms of the deal, Finsbury Food will receive £17.7m from Genius Foods on completion, with a further £3m payable in cash by the second anniversary of completion.

Genius Foods has a 50% share of the UK gluten-free bread market, and this deal will allow the company to strengthen its position further.

The transaction will allow Finsbury Food to focus on its growing cake and bread businesses, to further develop its licensed brand portfolio, and take advantage of the bolt-on acquisitions to drive long-term value.

In addition, the company will use the proceeds from the deal pay down its outstanding debts.

Finsbury Food has been manufacturing free-from bakery and other morning goods products since the acquisition of UCB in November 2005 for £2.7m and Livwell in April 2008 for £9.6m.

In December 2010, Finsbury’s entered into contractual joint venture arrangements with Genius over fresh gluten-free bread and an additional range of gluten-free products to be sold under the Genius brand.

As part of the latest deal, the contractual joint venture agreements between Finsbury Food and Genius Foods have been terminated.