Paignton-based Chantilly Patisserie was acquired by Real Good Food through its wholly-owned subsidiary Haydens Bakery from existing cash resources.
Chantilly Patisserie, which employs 40 people, will be run as a trading division of Haydens.
It currently supplies foodservice customers such as Marston’s Brewery, Warner Leisure, Brakes, and Country Range.
The acquisition of Chantilly would open up a new channel for Real Good Food, as it had already established itself as a supplier of high quality products to the growing foodservice sector, Real Good Food executive chairman Pieter Totté said.
“We will continue to identify and complete bolt-on acquisitions, as we seek to reach greater scale within our three pillar markets of cake decoration, food ingredients and in this case premium bakery,” he said.
“As we are clearly demonstrating, acquisitions will enhance our offering by targeting new sectors, product lines and geographies, as well as being earnings accretive.”
The business complements the offering of Haydens extremely well and it is envisaged that significant commercial opportunities for both businesses will be identified as a result, Totté added.
Earlier this month, Real Good Food issued a profit warning after it claimed a company restructure had a short-term negative impact on margins.
In its latest trading update, it said it expected earnings before interest, tax, depreciation and amortisation (EBITDA) for the year to March 31 2016 to remain flat, meaning the final profit outcome wasn’t likely to meet market expectations.
It said the current financial year had been one of “significant transition” as the group embarked on an operational strategy and investment programme and reorganised into three markets – cake decoration, food ingredients and bakery.
Real Good Food sold its sugar subsidiary Napier Brown for £44.4M last May, which will result in an exceptional profit of £9.4M in the current financial year. It said the money raised from the disposal would substantially reduce net borrowings.