The Finsbury Food Group has strengthened its operations in the ‘free-from’ gluten market with the £8.9 million acquisition of Yorkshire Farm Bakery (YFB) and A&P Foods.

YFB is a major manufacturer of gluten-free breads as well as rolls and cakes and is located on a freehold site in Hull. A&P shares the same site and produces gluten-free pre-mixes for YFB, as well as United Central Bakeries, which is already part of the Finsbury Group.

Both businesses have been acquired by Finsbury from the Arnett family, three of whom will remain involved. Finsbury has created a new trading company, Livwell, and £4.8m will be paid on completion, with the remainder payable in stages, ending with a final payment of £2.5m in July 2010.

Finsbury group, chief executive Dave Brooks told British Baker: “Yorkshire Farm is the biggest UK supplier of free-from with £10m of sales in the UK gluten-free market so this is an excellent opportunity. I have known the Arnett family for three years through UCB and three members of the family will remain in the business.”

In a statement issued by the company Brooks said: “The UK retail market offers huge scope for growth, as more and more consumers choose a wheat-free diet, and the UK medical prescription market, which is twice the size of the retail market, brings new opportunity.

“There is also significant scope to develop a stronger export business, as awareness grows in Europe. These businesses perfectly fit our acquisition criteria and their acquisition is further evidence of our group’s confidence in our market positioning and trading performance.”

Combined YFB and A&P sales in the year ended March 2007 were £7.3m, with forecast sales for this year expected to be no less than £8.5m. The acquired net assets are valued at £3.66m.