FIF.L Regulatory News (FIF)

21 Nov 2005 07:01

Finsbury Food Group PLC21 November 2005 Date: 21 November, 2005 On behalf of: Finsbury Food Group plc ("Finsbury" or "the Group") Embargoed until: 0700 hrs Finsbury Food Group plc Acquisitions Finsbury Food Group plc, one of the UK's leading manufacturers of premiumadded-value cakes and speciality breads, is today pleased to announce theacquisition of the entire share capital of the following companies, all of whichare based in Scotland: • The cake businesses of Enterprise Food Group Limited ("Enterprise") - California Cake Company Limited ("California") and Campbell'sCake Company Limited ("Campbell's"); and, • United Central Bakeries Limited ("UCB"). The acquisitions maintain the Group's current focus on the bread and cakessectors, areas where the Group can achieve its stated aim to be "the best atwhat we do". The businesses being acquired all have strong management teams,innovative niche and market-leading products, and strong relationships with themultiple retailers. Finsbury is paying a maximum consideration of £7.4m to Enterprise for Californiaand Campbell's, of which £3m is deferred and conditional. In addition Finsburywill be assuming responsibility for clearing £3.4m of intra-group debt withEnterprise. The maximum consideration for UCB is £2.5m, of which £0.5m is acontingent deferred payment. Both deferred payments are subject to futureprofitability, the results of which will be known during the current financialyear. For the year to June 2005, the acquisitions had a pro forma EBITDA of £2.2m(£1.5m California / Campbells, £0.7m UCB). Net assets are £1.3m (California /Campbells) and £0.80m (UCB), before Fair Value adjustments; in addition,California has tax losses of c£1m. These acquisitions have been debt-funded,and the goodwill generated will be subject to an annual impairment review. The Enterprise Cake Businesses California Cake Company Limited California was founded in 1984. The business supplies to the major supermarketsin the UK with a focussed product range that centres on low and full fat cakeslices. Approximately 25% of its current sales are derived from low fat productsunder the Weight Watchers brand, with the remainder from retailer brands.California employs over 200 members of staff covering seven day production.Turnover is in the region of £12 million, with capacity to grow. The companyoperates out of a leasehold factory and warehouse located in Coatbridge, nearGlasgow. Campbell's Cake Company Limited Campbell's was incorporated in 1994 and is based in Twechar, near Glasgow. Itis the market leader in cold set (no bake) products such as caramel shortcake,shortbread and Tiffin. It manufactures own label shortcake and shortbread forthe UK's blue-chip retailers such as Asda, Sainsbury, Tesco and Co-op. Turnoveris in the region of £2 million per year. The Twechar site is leasehold andemploys around 50 staff. UCB UCB was incorporated in March 1989 and is situated in Bathgate, near Edinburgh.It has extensive product capability, with the current range focussed upon potatocakes and scones, gluten free breads and Yum Yums. It supplies major multiples,including Asda and Tesco, plus the larger foodservice companies. The Bathgatesite has undergone continuous improvement due to investment in plant andequipment, and has in the region of 200 staff employed there. The business hasa turnover of approximately £10 million, but with significant capacity to growin its 100,000 sq ft freehold site. All the sites being acquired have EFSIS Higher Accreditation. Management As announced on 20 September in its preliminary results, Finsbury Food Group hasstrengthened the Group level management team in advance of these acquisitionsthrough the promotion of Phil Batchelor to the role of Group Commercial Directorand the appointment of Mike Woods as Managing Director of Memory Lane Cakes Ltd.The new companies joining the Group will become independently managedsubsidiaries alongside Nicholas & Harris and Memory Lane Cakes. The managementteams of the new subsidiaries will report to Dave Brooks, via their respectiveManaging Directors. Commenting on the acquisitions, Dave Brooks, Finsbury Food Group plc's ChiefExecutive, said: "I am delighted to be able to announce the completion of these acquisitions; thebusinesses will bring new skills and expertise into the Group and fit ouracquisition criteria of having strong management teams already in place andbeing the market leaders in their respective fields. "We look forward to welcoming them into the Group and working together torealise their full potential through organic growth, whilst maintaining thelevels of quality, customer service and innovation for which we are known." - ENDS - For further information: Finsbury Food Group Plc www.finsburyfoods.co.ukDave Brooks (Chief Executive) 07831 787 382John Lomer (Finance Director) 0777 888 9977 Redleaf CommunicationsEmma Kane/Miranda Good 020 7955 1410 • Publication quality photographs are available via RedleafCommunications on the numbers shown above This information is provided by RNS The company news service from the London Stock Exchange