Real Good Food has sold the Haydens Bakery business – excluding the Chantilly Patisserie operation – to Bakkavor Group for £12m.
Real Good Food (RGF) has invested £15m in Haydens over the past 18 months, and the deal will mean a write-down of around £10.2m at 31 March 2018.
“The significant investment made in plant and equipment was, however, one of the clear attractions to Bakkavor in its acquisition of Haydens,” stated RGF, adding the disposal would allow it to focus on profitable assets elsewhere in the group.
RGF also owns cake decorations business Renshaw, coatings and sauces supplier R&W Scott and snack bar manufacturer Brighter Foods.
The move follows a troubled period for RGF, which has secured additional funding from shareholders, and recently raised £1m in an open share offer. It has also disposed of the Garrett Ingredients business.
RGF said the £9.6m cash funds from the Haydens deal would be used to reduce debt and boost working capital. Bakkavor is also assuming £2.4m of third-party debt.
Haydens, part of RGF since its inception in 2003, bakes premium tarts, pies and crumbles, Danish pastries, sweet buns, yum yums and doughnuts. Its core customers are the major retailers, and it provides a distribution operation for one of the leading UK retailers.
The business operates from two sites in Devizes, Wiltshire, and has 480 employees. Excluding the Devon-based Chantilly Patisserie desserts business, which is not a part of the deal, Haydens contributed £31.3m of revenue in 2017, and broke even at profit before tax, closing that year with net liabilities of £0.8m.
Bakkavor said the acquisition would enable it to increases the breadth and depth of its desserts range, and extend its in-store bakery offer. Combined with ongoing expansion of Bakkavor’s facility in Newark, it will also boost capacity and automation.
“We are pleased to welcome Haydens to the Bakkavor Group,” said Bakkavor chief executive officer Agust Gudmundsson.
“It is a business which shares Bakkavor’s passion for providing outstanding service, quality and value to its customers and has a reputation for supplying some of the best-tasting sweet treats to the UK’s leading retailers.”
RGF chief executive Hugh Cawley said the deal marked an important next step in the restructuring and performance improvement of Real Good Food.
“Given the sizeable areas of common interest, we believe that Haydens and its staff will prosper better in partnership with Bakkavor,” he added.