CARDIFF, UK — Frisbee Bidco Ltd. (Bidco) has reached an agreement to acquire Finsbury Food Group PLC, a specialty baked foods manufacturer that sells a range of cakes, bread and baked snacks in the United Kingdom and internationally.
Under terms of the transaction, Bidco has agreed to pay 110p in cash per share for 130,383,361 shares of Finsbury, or approximately £143.4 million ($177.45 million). The companies said the cash offer represents a premium of approximately 23.6% to the closing price of 89p on Sept. 19 and 54.9% to the closing price of 71p on Sept. 2, 2022, which was the last date prior to the public disclosure of DBAY Advisors Ltd.’s interest in Finsbury.
Founded in 1925, Finsbury Food supplies a broad range of customers within both the grocery retail and foodservice sectors. It is one of the largest specialty bakery groups in the United Kingdom offering a comprehensive product range that includes: large premium and celebration cakes; small snacking cake formats such as cake slices and bites; artisan, healthy lifestyle and organic bread, rolls, muffins (sweet and savory) and morning pastries; and gluten-free bread, morning goods and cake. Finsbury has a core UK Bakery division and an Overseas division that together incorporate manufacturing sites in the United Kingdom and Poland, and an 85% equity stake in a French business that supplies and distributes Finsbury’s UK-manufactured products and third-party products in Europe.
Bidco is a limited company registered in the Isle of Man. It was incorporated on Aug. 18 for the purpose of the acquisition, and its entity ultimately owned by funds managed by DBAY. DBAY, which was founded in 2011 and manages a range of funds and co-investment vehicles for endowments, foundations and other institutional investors, began acquiring shares of Finsbury Food in August 2022.
“We have been supportive shareholders of the business for over a year and have been impressed with the management team during our ownership, but we strongly believe Finsbury would benefit from transformational M&A, including international expansion, and this would be better achieved in private ownership without the barrier of the current listing,” said Alexander Paiusco, chief executive officer of DBAY. “We look forward to working with Finsbury’s management and employees to accelerate Finsbury’s strategy and unlock the long-term value in Finsbury for all stakeholders.”
Commenting on the transaction, Peter Baker, non-executive chairman of Finsbury, added, “Finsbury has a successful track record under the leadership of the current management team of delivering sustainable, profitable organic growth along with strategic, targeted acquisitions. For the next phase of the Finsbury Group’s development the business will need to pursue strategic, transformational M&A to achieve the scale required to be successful in an increasingly competitive and demanding marketplace.
“I am confident that Finsbury will thrive under DBAY’s stewardship in the private market, with access to DBAY’s investment and operational support to pursue the current strategy of scaling Finsbury’s buy-and-build M&A in the future. The Finsbury board has carefully reviewed the terms of DBAY’s cash offer, and believes it provides shareholders with an accelerated, de-risked opportunity to realize their investment in full and in cash at an attractive premium to both the current share price and the long term weighted average share price.”The transaction is expected to be finalized by the fourth quarter of 2023.