UK-based bakery products manufacturer Finsbury Food has sold its free-from bakery business to Scottish firm Genius Foods for £21m, as part of its efforts to focus on core cake and bread businesses.
The sale includes two subsidiaries Livwell and United Bakeries (UBH), the holding company of United Central Bakeries (UCB), which account for 14% of the company's annual revenues.
Under the terms of the deal, Finsbury Food will receive £17.7m in cash from Genius Foods on completion, with a further £3m payable in cash by the second anniversary of completion.
The transaction will allow Finsbury Food to focus on its growing cake and bread businesses, in order to further develop its licensed brand portfolio and pay down its outstanding debts.
Finsbury Food chief executive officer John Duffy said the sale will allow the company to further invest, pay down debt, and take advantage of additional opportunities available, with the goal of driving shareholder value.
As a part of the transaction, the previous contractual joint venture arrangements between Finsbury and Genius have been terminated.In December 2010, Finsbury Food entered into an agreement with Genius in respect of gluten-free bread and an additional range of gluten-free products to be sold under the Genius brand.
Finsbury Food, through its subsidiaries UCB and Livwell, manufactures free from bakery and other morning goods products. The company acquired UCB in November 2005 for £2.7m and Livwell in April 2008 for £9.6m.UCB and Livwell also produce yum yums and potato scones.
