BOULDER, COLO. — Boulder Brands, Inc. has its sights set on the No. 1 position in the gluten-free market following the May 2 acquisition of Davies Bakery. Boulder Brands paid approximately £2.5 million ($3.9 million) for the U.K.-based gluten-free bakery and bread manufacturer, which is a subsidiary of Frank Roberts & Sons. Davies Bakery manufactures and sells gluten-free bread and baked goods in the United Kingdom under its own brand, Yes!YouCan, and co-packages for private label customers.

Boulder said it plans to use Davies’ retail relationships, facility and expertise in the U.K. market to launch Udi’s bakery and grocery items in the United Kingdom later this year.

“While this acquisition is not material in size, we are very excited about the potential to take the Udi’s brand to the U.K.,” Stephen Hughes, chairman and chief executive officer, said during a May 2 conference call to discuss first-quarter financials. “We’ll utilize Davies’ state-of-the-art gluten-free manufacturing facility and expertise in the U.K. market. Our plan is to launch five to seven Udi’s bakery items and five to seven Udi’s grocery items later this year.

“With Udi’s success in Canada, we’ve grown quickly to $10 million in sales since the launch in late 2010. We believe the Udi’s brand will be very successful in the U.K. market.”

Delving deeper into what the acquisition means for Boulder Brands, Mr. Hughes said the Davies facility may have the ability to support $20 million in baked goods, but it is on a piece of property that easily could be doubled.

The acquisition also should boost Boulder Brands’ global standing as a gluten-free leader.

“It’s hard to get precise numbers, but we right now believe we’re the No. 2 gluten-free company in the world,” he said. “Dr. Schar is No. 1. They’re based in Germany. We’re on a growth path that, compared to their growth path, that would probably take us to the No. 1 company in the world on gluten-free within the next 12 to 18 months. So, we think it’s worth finding out whether or not Udi’s can travel.”

Mr. Hughes said Boulder Brands has been eying the U.K. as a region for growth since acquiring Glutino, noting the gluten-free category is more established there than in the United States.

“In the U.K. they actually have ‘free-from’ sections that are free from the eight allergens,” he said. “Most of that is gluten-free sets.”

Another positive about the gluten-free category in the U.K. is the fact bakery is merchandised next to grocery, he said.

Mr. Hughes said Boulder Brands was not willing to go to the United Kingdom unless it was confident it could “travel on one of our brands.” Udi’s success in Canada has given it the confidence to explore the move overseas, he said.

“This is not something … if we don’t have success we’re going to be bogged down on,” he said. “We’ve got a pretty crisp decision criteria. We’ve had some initial conversations with customers who are very excited about Udi’s coming to the U.K., so that’s a good sign.”

Perhaps most importantly, Mr. Hughes said Boulder Brands is confident in the Davies management team’s ability to carry out the expansion.

“We’re not going to kid ourselves that we’re going to do this by remote control,” he said. “We think we’ve got a great management team on the ground at Davies, very passionate about the gluten-free space, have built a state-of-the-art facility that really does need volume, and we’re going to find out quickly. The next week we have major calls with Tesco and Sainsbury, and we’ll get into the game quickly and, I think, be able to have an opportunity for a big win but with a defined investment. I think it’s a really good risk-reward model for us. If it works in the U.K. it will probably work in the rest of Europe.”