Cake Box to buy Asian sweets manufacturer Ambala Foods for £22m

(Sharecast News) - AIM-listed Cake Box said on Wednesday that it has agreed to buy Asian sweets manufacturer and retailer Ambala Foods for £22m.

The consideration consists of £16m for Ambala and £6m for the company's manufacturing facility in Welwyn Garden City.

To help finance the acquisition, Cake Bok - which makes fresh cream celebration cakes - raised £7m in a placing of just over 3.88 million new ordinary shares at 180p each. The balance of the consideration will be funded through a new £15.2m term loan facility and existing cash resources.

Cake Box also gave a brief update on trading, saying it has continued to see an improvement in sales year-on-year since its interim results and enjoyed record sales during the festive period.

The company said it was on track to open more than 25 stores by the year end and confident of meeting market expectations for the year ending 31 March 2025.

Chief executive Sukh Chamdal said: "We are pleased to announce the acquisition of Ambala Foods Ltd, a leading manufacturer and retailer of Asian confectionery in the UK since 1964. This strategic acquisition represents a significant opportunity to leverage the strengths of both brands to expand our market presence and accelerate our growth.

"Ambala's rich heritage and established customer base complement Cake Box's values and commitment to quality and innovation. By adding Cake Box's expertise and resources to Ambala, we aim to create a unique blend of traditional and contemporary delicacies that appeal to a diverse audience, ultimately driving growth and profitability.

"We are confident that this acquisition will resonate with Cake Box's existing customer base and to its commitment to quality products and customer service."