Acquisition of Lees Foods Limited
30 January 2023
On behalf of:
Finsbury Food Group Plc ("Finsbury", the "Group" or the "Company")
Finsbury Food Group Plc
Acquisition of Lees Foods Limited
Finsbury Food Group Plc (AIM: FIF), a leading UK speciality bakery manufacturer of cake, bread and morning goods for both the retail and foodservice channels, announces that it has acquired 100% of the share capital of Lees Foods Limited ("Lees"), a leading manufacturer of meringues, teacakes and snowballs.
Established in 1931, Lees employs more than 200 staff at its site in Coatbridge, Scotland. Lees has a UK market-leading position in the manufacture of meringues and has significant capability in the sweet treats category, adjacent to Finsbury's existing markets. The acquisition is in line with Finsbury's strategy to diversify its product capability into areas with high growth potential.
Lees has a broad customer base and holds strong supply relationships with the leading UK supermarkets in addition to foodservice and export customers. The Finsbury Board believes that it will be able to leverage the scale and breadth of the Finsbury commercial team and licensed brand portfolio to drive incremental growth for Lees. In addition, there will be scale cost synergies over time.
Lees' adjusted underlying EBITDA is £0.9 million from adjusted underlying net sales of £21.6 million. The acquisition will be earnings accretive immediately in FY23.
The consideration for the acquisition payable by Finsbury is a cash amount of £5.7 million, on the basis that Lees is acquired cash and debt-free and with an agreed level of working capital. The consideration is being funded entirely from the Group's existing debt facilities.
John Duffy, Chief Executive of Finsbury Food Group Plc, commented:
"We are delighted to announce the strategic acquisition of Lees Foods Limited, as we consolidate our position in the sweet treats sector and grow our manufacturing presence in Scotland.
Lees currently has a well-established position in the UK meringue category 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 and unlock further commercial opportunities, including out of home. We look forward to welcoming Lees to the wider Group."
 Based on Lees' unaudited management accounts for the 12 months ended 31 December 2022.
Finsbury Food Group
John Duffy (Chief Executive)
Steve Boyd (Finance Director)
029 20 357 500
Panmure Gordon (UK) Limited
Oliver Cardigan / Atholl Tweedie (Corporate Finance)
Rupert Dearden (Corporate Broking)
020 7886 2500
020 3405 0205
Notes to Editors:
· Finsbury Food Group Plc (AIM: FIF) is a leading UK and European manufacturer of cake and bread bakery goods, supplying a broad range of blue-chip customers within both the grocery retail and 'out of home eating' foodservice sectors including major multiples and leading foodservice providers.
· The Company is one of the largest speciality bakery groups in the UK and, together with its overseas division, has sales in the financial year ending 2 July 2022 of £357 million.
· The Company's bakery product range is comprehensive and includes:
· Large premium and celebration cakes;
· Small snacking cake formats such as cake slices and bites;
· Artisan, healthy lifestyle and organic breads through to rolls, muffins (sweet and savoury) and morning pastries, all of which are available both fresh and frozen dependent on customer channel requirements; and
· Gluten Free bread, morning goods and cake ranges.
· The Company is one of the largest ambient cake manufacturers in the UK, a market valued at £1.06 billion (source: IRI 52 w/e 31 Dec 2022). The retail bread and morning goods market has a value of £5.7 billion (source: Kantar Worldpanel 52 w/e 25 Dec 2022). The retail Free From cake market is valued at £60 million (source: Kantar Worldpanel 52 w/e 25 Dec 2022). The retail Free From bread and morning goods market is valued at £173 million (source: Kantar Worldpanel 52 w/e 25 Dec 2022).
· The Company comprises a core UK bakery division and an overseas division:
· The UK bakery division has manufacturing sites in Cardiff, East Kilbride, Hamilton, Salisbury, Sheffield, Manchester, and Pontypool.
· Following completion, the Company will have an additional manufacturing site in Coatbridge.
· The overseas division comprises the Company's 85% owned company, Lightbody-Stretz Limited, which supplies and distributes the Group's UK-manufactured products and third-party products, primarily to Europe, and the Company's manufacturing facilities in Rybarzowice and Żywiec in Poland.