Finsbury, a leading UK speciality bakery manufacturer of cake, bread and morning goods for retail and foodservice customers, announced the proposed deal today (May 6).
Under the terms of the agreement it would acquire the production assets, stock and customer list of Johnstone’s from administrator FRP Advisory.
Johnstone’s unaudited turnover for 2014 was £9M. The purchase price of the company, which supplies cakes such as caramel shortcakes and brownies to national coffee shop chains, supermarkets and independents, has not been disclosed.
According to Finsbury the move would escalate its entry into the foodservice cake channel and in particular the high-growth national coffee shop segment.
It also claimed that it dovetailed with its strategy to broaden its offering, indicated by its takeover of Fletchers Group of Bakeries last year for £56M from private equity owner Vision Capital.
Completion of the acquisition was conditional on the finalisation of property lease details which Finsbury and FRP were working to complete as soon as possible, it said.
Finsbury stressed that it would provide manufacturing and finance staff to ensure a smooth transition process until Johnstone’s was fully integrated into the business.
Finsbury said it intended to work with the Johnstone’s management team at its existing site in East Kilbride to develop its trading strengths. All 150 staff employed by Johnstone’s would be kept on, Finsbury said.
‘Strategy to diversify’
“Johnstone’s Just Desserts will be a bolt-on acquisition and is in line with our strategy to diversify into new channels,” said Finsbury ceo John Duffy.
“This illustrates the group’s continued reach into the foodservice ‘out-of-home eating’ market and the broadening of our product offering and customer base.
“The strength of Johnstones’ customer relationships are testament to the quality of its products and we look forward to welcoming the company into the Finsbury Group and providing the resources and investment to develop its full potential over the coming years.”
Johnstone’s appointed FRP as administrator on March 24 after the loss of two major independent accounts.
Finsbury makes a range of cakes, including many under licence for brands such as Disney, Weight Watchers and Thorntons, as well as Nicholas & Harris speciality and organic bread.
The company won the trophy for Bakery Manufacturing Company of the Year at Food Manufacture’s 2014 Food Manufacturing Excellence Awards. Entries for this year’s awards, which take place at London’s Lancaster hotel are already underway and should be submitted by July 17. For more details, click here.