LONDON — Finsbury Food Group P.L.C., a U.K.-based maker of cake, bread and gluten-free bakery goods, is expanding its joint venture agreement with Genius Foods Ltd. to include the introduction of additional gluten-free products to be sold under the Genius brand. In doing so, Finsbury said the two companies will operate as contractual joint venture partners within the U.K. fresh bakery goods sector.
According to Finsbury, the joint venture agreement contains details of an option, granted by Finsbury to Genius, to buy the business and assets of its United Central Bakeries and Livwell subsidiaries for £21 million ($32.5 million), at any point within the next 12 months.
United Central Bakeries and Livwell are the subsidiaries of Finsbury that produce Finsbury’s gluten-free products, as well as yum-yums and potato scones. In the year ended June 30, 2010, United Central Bakeries and Livwell recorded sales of £23.1 million and profit before tax (after Group costs) of £1 million, which in the event of the option being exercised will no longer accrue to the Finsbury Group, the company said. In the event of the option being exercised the proceeds of the sale will be used to repay debt and for general corporate purposes, Finsbury said. Genius already has begun transferring the potato scone and yum-yum business back to the Finsbury Group.
“We have enjoyed a successful working relationship with Genius, and believe that this joint venture will cement and develop this relationship further,” said John Duffy, chief executive officer of Finsbury. “We also believe the joint venture will give added momentum to the fastest growing area of our business, and we look forward to working with Genius to drive forward our market leading position for the longer term.”
Gervase Cottam, c.e.o. of Genius, added, “We are looking forward to further developing the strong team that has been working with Finsbury as a key partner in the U.K. Both parties are aligned and focused on developing great tasting gluten-free products that deliver against the exacting demands of our customers and consumers.”