TIDMFIF
RNS Number : 2033C
Finsbury Food Group PLC
21 February 2022
Date: 21 February 2022
On behalf Finsbury Food Group Plc ("Finsbury" or "the Company")
of:
For immediate release
Finsbury Food Group Plc
Increased Stake in European Distribution Business
Finsbury Food Group Plc (AIM: FIF), a leading UK speciality
bakery manufacturer of cake, bread and morning goods for both the
retail and foodservice channels, is pleased to announce that its
wholly owned subsidiary Lightbody Holdings Limited has today
entered into an agreement to acquire a further 35% of the issued
share capital of Lightbody-Stretz Limited ("Lightbody-Stretz") from
Phaste S.a.r.l. ("Phaste"), bringing its holding to 85% (the
"Acquisition"), and has also entered into an option agreement to
acquire the remaining 15% after two years (the "Option Agreement").
The Acquisition is expected to be completed later today.
Lightbody-Stretz is the holding company of the Group's European
distribution business (Lightbody Europe SAS ("Lightbody Europe"))
operating primarily in the French and Benelux markets and
distributing products produced by the wider Finsbury group for
nearly 20 years.
The Acquisition is being undertaken on a cash free / debt free
basis with the headline consideration being EUR7,137,000 subject to
a subsequent true-up pursuant to a customary completion accounts
mechanism. Under the Option Agreement, the consideration for the
remaining 15% stake in Lightbody-Stretz will be fixed at the time
of its acquisition based on a multiple of the EBITDA of Lightbody
Europe in the 12 months leading up to the exercise of the option,
again on a cash free / debt free basis (with a subsequent
completion accounts true-up) . Phaste has also been granted a put
option to require Finsbury to acquire the remaining stake on
identical terms. All consideration under the Acquisition and the
Option Agreement will be settled in cash.
In the year to 26 June 2021, Lightbody Europe reported a net
profit after tax of EUR2.3m and the business has continued to
deliver strong growth through the first half of the 2022 financial
year. It has gross assets of EUR13.5m as at 26 June 2021. The
Acquisition is in line with the Company's M&A strategy and the
Company considers that securing a majority stake in this business
will enhance its capacity to support the business and deliver
growth outside of its primary UK markets. The Acquisition will be
earnings accretive. Operationally the business will continue to be
managed on a day-to-day basis by the current management team.
Lightbody-Stretz has historically been consolidated into the
group accounts as a subsidiary with a corresponding non-controlling
interest on the basis that Lightbody-Stretz is commercially
dependant on Finsbury for supply of product into its distribution
channels.
Related Party Transactions
Phaste is owned by Philippe Stretz and has the right to appoint
a director of Lightbody-Stretz. Phaste is a director of
Lightbody-Stretz and the Président of Lightbody Europe. As such,
Philippe Stretz is deemed a related party of Finsbury for the
purposes of Rule 13 of the AIM Rules for Companies (the "AIM
Rules").
Lightbody Europe occupies premises leased from Coysevox 2, a
company controlled by Philippe Stretz and as part of the
transaction Lightbody Europe has entered into non-binding heads of
terms with Coysevox 2 to extend the current lease beyond its expiry
in July 2022 for a period of nine years with the option to break at
six years (the "Lease"). The annual rent will be EUR75,500 p.a.
subject to annual inflation-based increases. This will enable
Lightbody Europe to continue its operations without disruption.
Lightbody Europe will continue to be run by its current
management team on a day-to-day basis and the Company is pleased to
have secured the services of Philippe Stretz for two years
following completion with Phaste continuing in the role of
President of Lightbody Europe.
The Acquisition, together with the entry into the Option
Agreement and the Lease, constitute a related party transaction
under Rule 13 of the AIM Rules. As such, the Directors consider,
having consulted with the Company's nominated adviser, Panmure
Gordon, that the terms of the Acquisition, the Option Agreement and
the Lease are fair and reasonable insofar as the Company's
shareholders are concerned.
John Duffy, Chief Executive of Finsbury, commented:
"We are pleased to announce this further investment in our
French subsidiary, which increases our stake to 85%, supporting the
successful local management team's growth ambitions and our
continued desire to invest behind our European growth. This
acquisition is aligned to the Company's M&A strategy as the
Board continues to grow the Group both in the UK and in Europe,
including the potential for meaningful acquisition."
This announcement contains inside information for the purposes
of Article 7 of Regulation (EU) No 596/2014 which is part of
domestic UK law pursuant to the Market Abuse (Amendment) (EU Exit)
Regulations (SI 2019/310) ("UK MAR"). Upon publication of this
announcement, the inside information (as defined in UK MAR) is now
considered to be in the public domain.
Contact:
Finsbury Food Group
John Duffy (Chief Executive)
Steve Boyd (Finance Director) www.finsburyfoods.co.uk 029 2035 7500
Panmure Gordon (UK) Limited
Oliver Cardigan (Corporate
Finance)
Atholl Tweedie
Erik Anderson (Corporate
Broking)
Edward Walsh 020 7886 2500
Alma PR
Sam Modlin
Rebecca Sanders-Hewett
David Ison
Molly Gretton finsbury@almapr.co.uk 020 3405 0205
Notes to editors:
-- Finsbury Food Group Plc (AIM: FIF) is a leading UK
manufacturer of cake and bread bakery goods, supplying a broad
range of blue-chip customers within both the grocery retail and
'out of home eating' foodservice sectors including major multiples
and leading foodservice providers.
-- The Company is one of the largest speciality bakery groups in
the UK and, with its Overseas division, has sales in the financial
year ending 26 June 2021 exceeding GBP313m.
-- The Company's bakery product range is comprehensive and includes:
-- Large premium and celebration cakes.
-- Small snacking cake formats such as cake slices and bites.
-- Artisan, healthy lifestyle and organic breads through to
rolls, muffins (sweet and savoury) and morning pastries, all of
which are available both fresh and frozen dependent on customer
channel requirements.
-- Gluten Free bread, morning goods and cake ranges.
-- The Company is one of the largest ambient cake manufacturers
in the UK, a market valued at GBP1bn (source: IRI 52 w/e 4th
December 2021). The retail bread and morning goods market has a
value of GBP5.2 billion (source: Kantar Worldpanel 52 w/e 26th
December 2021). The retail Free From cake market is valued at GBP54
million (source: Kantar Worldpanel 52 w/e 26th December 2021). The
retail Free From bread & morning goods market is valued at
GBP153 million (source: Kantar Worldpanel 52 w/e 26th December
2021).
-- The Company comprises a core UK Bakery division and an Overseas division:
-- The UK Bakery division has manufacturing sites in Cardiff,
East Kilbride, Hamilton, Salisbury, Sheffield, Manchester, and
Pontypool.
-- The Overseas division comprises the Company's 85% owned
company, Lightbody Stretz Ltd, which supplies and distributes the
Group's UK-manufactured products and third party products,
primarily to Europe, and the Company's manufacturing facilities in
Rybarzowice and Zywiec in Poland.
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END
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