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Ultrapharm Limited has been acquired by Finsbury Food Group

Cardiff – CFI UK is pleased to announce it acted as the exclusive corporate finance advisor to Ultrapharm Limited on its sale to Finsbury Food Group Plc.

Finsbury Food Group Plc (AIM: FIF), a leading UK speciality bakery manufacturer of cake, bread and morning goods for both the retail and ‘out of home eating’ foodservice channels, has acquired 100% of the share capital of Ultrapharm Limited (“Ultrapharm”), a ‘Free From’ bakery manufacturer.

The acquisition of Ultrapharm supports the Group’s ongoing strategy to further diversify its product capability into high growth areas.

Established in 1993, Ultrapharm employs more than 240 staff across manufacturing sites in the UK and Poland. As a specialist ‘Free From’ bakery, the business has an extensive product range including bread, buns & rolls and other morning goods. Ultrapharm has a diverse customer base with long term blue-chip customers, including Finsbury itself, where it supplies Free From products to Lightbody Europe.

The opportunity to invest in the acquired sites and to expand the Group’s existing facilities to manufacture Free From products, a category of which the Group has previous expertise, provides significant upside sales potential to the Group in a growing segment.

For the year ended 31 December 2017, Ultrapharm generated EBITDA of £1.6 million and profit before tax of £0.8 million which have continued to grow since year end. Revenue generated was £19.5 million, up 35% from £14.5 million for the comparative period in 2016. As at period end, gross assets were £10.8 million. The acquisition will be earnings accretive immediately post-completion.

CFI UK advised the shareholders of Ultrapharm, negotiating and structuring the transaction for which the total consideration payable is split with £17 million payable in cash at completion, up to £3 million payable in annual instalments to the period to 30 June 2021; subject to the continued employment of key management and a final incentive payment subject to performance criteria over the period to 30 June 2021 estimated at approximately £1.0 million and capped at £5 million for regulatory purposes. Implied EBITDA and revenue multiples are 13.1x and 1.1x respectively for the year ending December 2017. The consideration will be funded from the Group’s existing cash and debt facilities.

John Duffy, Chief Executive of Finsbury Food Group plc, commented “We are delighted to have secured such a valuable strategic acquisition, one that presents the Group with a significant opportunity to access an exciting and high growth marketplace.

“Ultrapharm has a robust market position both in the UK and Europe, extensive technical ability and strong relationships across a high quality and diverse customer base. This provides Finsbury with the opportunity to build upon both businesses existing retail relationships, as well as unlocking further commercial opportunities.

“Alongside the growth opportunities this acquisition brings, in line with the Group’s strategy, it further diversifies us by geography and category; giving us a further foothold in Europe and allowing us to diversify into the Free From market.

“We look forward to welcoming Ultrapharm to the team and investing in the wider Group to capitalise on such a significant opportunity for growth.”

Marc Lewis, Chief Executive of Ultrapharm, commented “We are delighted to be joining the Finsbury Group and looking forward to growing Ultrapharm’s exciting prospects with their support.”

Sam Forman added “It is fantastic to see and have played a part in the combination of two leading Welsh food and beverage manufacturers. Ultrapharm has benefited from the fast growth being experienced in the ‘free from’ market with its extensive technical ability and strong relationships across a high quality and diverse customer base. Finsbury will look to capitalise on the robust market position both in the UK and Europe which the Lewis family has established over the past 15 years with the added opportunity to build upon both businesses existing blue chip retail relationships.”

Food & Beverage & Agribusiness

has been acquired by

Advised by:

Frank Holmes

Tim Brotherton

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