The deal will enable Finsbury to focus on its cake and bread business, which it plans to do by further developing it licensed brand portfolio, as well as looking to take advantage of “the right bolt-on acquisitions”.
The free-from business, which consists of two subsidiaries – Livwell and United Bakeries – accounted for 14% of the group’s revenues, and has been sold on a cash-free, debt-free basis.
In December 2010, Finsbury entered into a contractual joint venture deal (JV) with Genius Foods, an existing partner and owner of the Genius gluten-free brand, which would see the launch of new gluten-free products.
As part of the deal, there was also an option for Genius to buy the business and assets of UCB and Livwell, which produce Finsbury’s gluten-free products, as well as yum yums and potato scones, for a consideration of £21m.
Finsbury said the sale would transform its balance sheet, with a cash balance of around £17.7m paid to the group on completion, and a further £3m payable by the second anniversary of completion.
John Duffy, chief executive, Finsbury Food Group, said: “We believe our decision to focus on our core cake and bread business is the group putting its best foot forward. The sale will allow the group to further invest, pay down debt, and take advantage of additional opportunities available to us, with the ultimate goal of driving shareholder value.”
Roz Cuschieri, chief executive of Genius, said: “The acquisition of these two bakeries will be transformational for Genius and will enable us to accelerate the development of the brand’s gluten-free range of bakery products.
“The acquisition of own-label capability will allow us to offer a full category perspective and we look forward to working closely with our retail customers to develop this growing category with them.”