Bakery manufacturer acquired at 6.3x underlying earnings
Mon, 30 Jan 2023 | BUSINESS SALE
Bakery firm Lees Foods has been acquired by listed bakery business Finsbury Food Group in a deal that values the company at £5.7 million. The fee represents approximately a 6.3x multiple of Lees Foods’ underlying pre-tax earnings of £900,000 in its latest financial results, on adjusted underlying net sales of £21.6 million.
The deal sees Finsbury acquire 100 per cent of Lees Foods on a cash and debt-free basis with an agreed level of working capital. Finsbury Food Group expects the acquisition to be immediately earnings accretive for the full year 2023.
Lees Foods was established in 1931 and now employs over 200 staff at its 80,000 sq ft manufacturing facility in Coatbridge, Scotland. The company’s products include teacakes, meringues and marshmallow-and-coconut snowballs, which it supplies to foodservice and supermarket channels across the UK.
While the company already has a well-established position in its market segment, a broad customer base and strong supply relationships with clients, Finsbury’s board believes that it can leverage its scale and portfolio to drive further growth and cost synergies for the firm.
Finsbury Food Group said: “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.”
Commenting on the acquisition, Finsbury Food Group Chief Executive John Duffy said: "We are delighted to announce the strategic acquisition of Lees Foods Ltd, 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.”
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