Finsbury cake deal
02 February, 2007
Finsbury Food Group's purchase of Lightbody Celebration Cakes will make it the leading player in the UK premium cakes market, it claimed this week.
The premium bakery group announced this week it had agreed to buy Lightbody business, which saw £46m turnover in the year to April 2006, for £37.5m, subject to shareholder agreement at a meeting on 22 February.Finsbury chief executive Dave Brooks told British Baker he and Lightbody's MD Martin Lightbody had been "talking seriously" over a possible deal over the past year.Lightbody will become strategic development director of the enlarged group from May and have a 28.1% stake in it, making him its largest single shareholder. Seven existing directors will have a combined 18% stake. The remaining 54% of shares are on the Alternative Investment Market.Finsbury's philosophy on the Lightbody business was: "If it ain't broke, don't fix it", Brooks said, but Finsbury does plan to make an estimated £2m savings through synergies.It plans to close its California Cake bakery in Coatbridge by the end of the year and move production and staff to Lightbody's premises in Hamilton. And Brooks said the commercial team would be ratonalised, to give supermarkets one point of contact for Finsbury Cakes - across its Memory Lane, Campbells Cakes, and Lightbody divisions.He said: "With the acquisition we will have a scale where we can drive our premium agenda with all our major customers. This really is a partnership. It creates the leading player in the premium end of the UK cake market and the number one celebration cakes supplier." He said that the deal would also give a "fantastic boost" to Finsbury's children's cakes business. Memory Lane Cakes has the licence to use the Nestlé brand and Lightbody has the Disney licence, as well as a Thorntons licence.Martin Lightbody told British Baker he decided to sell his 100-year old family business because being part of the enlarged Finsbury group would offer significant opportunities for growth. He commented: "I am looking forward to taking my development team to Finsbury and getting stuck in to new ranges. We are playing with the big boys now!"An analyst hailed the latest deal as "sensible". He said: "Martin Lightbody has a cash exit, and what sounds like a roving role at Finsbury and you have a logical enlarged group of scale at the top end of the cake market."