The deal, announced today (October 10), will make the business one of the UK’s largest speciality bakery groups, with sales of nearly £300M and a broad spread of retail and foodservice customers. The acquisition is expected to contribute to earnings during the first full year of ownership.
Finsbury said the purchase will: deliver complementary product ranges and new food service channels; allow retail customer diversification; exploit the benefits of significant capital investment within Fletchers manufacturing and, in due course, offer a multi-channel platform for further acquisitions.
In a statement to the City, Finsbury said:“The acquisition will provide a platform for the group to address the attractive UK foodservice bakery market, which is worth approximately £900M per annum, 70% of which is morning goods.”
‘Food service markets’
Finsbury Food chief executive John Duffy said the deal will prove “a transformational development” for the business. “Fletchers is a highly complementary business, which broadens the Finsbury UK speciality bakery product, customer and channel growth potential and will provide a strong platform for the group to address the foodservice markets,” said Duffy.
“We believe the enlarged group will be in a strong position for new licensing arrangements, joint ventures and stronger customer and brand relationships. By servicing both the cake and bakery market, through both retail and foodservice, the enlarged group will have a diversified product and customer offering, and greater potential for driving growth for our shareholders.”
Fletchers’ md Stephen Holding said: “This is an exciting next step for the company and I'm looking forward to the opportunities that being part of the enlarged Finsbury Foods will bring.”
‘The ideal partner’
Vision Capital said under its ownership Fletchers had developed high quality products across a range of fresh and frozen baked goods, particularly in morning goods, as well as building a large food service business. Andrew Rich, partner at Vision Capital, said: “Fletchers is a strong, profitable and growing company with a leading position in the fresh and frozen baked goods industry. Finsbury is the ideal partner to take Fletchers to the next stage of its development …”
The deal is subject to the approval of Finsbury shareholders.
Fletchers was acquired by Vision Capital from Northern Foods in 2007. It operates three bakeries: Fletchers, based in Sheffield, Grain d'Or, in London, and Kara in Manchester. Its fresh and frozen bakery products include American and English muffins, buns an rolls, bread and speciality bread, pastries, donuts, scones, baguettes and doughballs.
Finsbury is the UK's second largest manufacturer of ambient packaged cake, excluding in store bakery, with a market share valued at £924M.
Over the past three years, Vision Capital has invested €650M in 13 companies and manages assets worth €1.7bn.
Meanwhile, Finsbury has been shortlisted in the Bakery manufacturing company of the year category of the Food Manufacturing Excellence Awards. Be among the first to learn the identity of the winners by booking your place at the gala awards evening at the Park Lane Hilton on the evening of Thursday November 20.