Cardiff-based Finsbury Food Group announced it has acquired 100% of the share capital of Coatbridge-based Lees Foods Limited, the maker of teacakes, snowballs and meringues, for £5.7 million in cash.

Lees employs more than 200 staff.

“Lees has a UK market-leading position in the manufacture of meringues and has significant capability in the sweet treats category, adjacent to Finsbury’s existing markets,” said Finsbury.

“The acquisition is in line with Finsbury’s strategy to diversify its product capability into areas with high growth potential.

“Lees has a broad customer base and holds strong supply relationships with the leading UK supermarkets in addition to foodservice and export customers.

“The Finsbury Board believes that it will be able to leverage the scale and breadth of the Finsbury commercial team and licensed brand portfolio to drive incremental growth for Lees.

“In addition, there will be scale cost synergies over time.

“Lees’ adjusted underlying EBITDA is £0.9 million from adjusted underlying net sales of £21.6 million. 

“The acquisition will be earnings accretive immediately in FY23.

“The consideration for the acquisition payable by Finsbury is a cash amount of £5.7 million, on the basis that Lees is acquired cash and debt-free and with an agreed level of working capital.

“The consideration is being funded entirely from the Group’s existing debt facilities.”

Finsbury Food Group Plc CEO John Duffy said: “We are delighted to announce the strategic acquisition of Lees Foods Limited, as we consolidate our position in the sweet treats sector and grow our manufacturing presence in Scotland.

“Lees currently has a well-established position in the UK meringue category and strong relationships across a high quality and diverse customer base.

“This provides Finsbury with the opportunity to build upon both businesses’ existing retail relationships and unlock further commercial opportunities, including out of home. We look forward to welcoming Lees to the wider group.”