Finsbury Food Group, owner of Scottish cakes producer Lightbody, is in talks to buy an East Kilbride bakery in a deal that would save 150 jobs.
The proposed acquisition comes after Johnstone’s Just Desserts, a maker of brownies and caramel shortcake, fell into administration in late March.
Johnstone’s, which supplies coffee shop chains, generated turnover of £9 million last year, and Finsbury said it was seeking to buy the business, assets, stock and customer list from administrators at FRP Advisory.
Finsbury said it plans to work with the Johnstone’s management team at its existing site in East Kilbride as it eyes expansion into the “high growth” coffee shop market. If the deal goes ahead, all 150 employees will remain with the company.
Chief executive John Duffy said: “Johnstone’s Just Desserts will be a bolt-on acquisition and is in line with our strategy to diversify into new channels. This illustrates the group’s continued reach into the food service ‘out of home eating’ market and the broadening of our product offering and customer base.”
In March, Finsbury said its pre-tax profits almost doubled to £4.1m in the first six months of its financial year, helped by demand for branded cakes, including those to tie in with the Disney box office smash Frozen.
The group also bought Lightbody Cakes in 2007. It employs more than 1,000 workers at its Scottish facilities in Hamilton and East Dunbartonshire.
Completion of the Johnstone’s deal depends on finalising property lease details, and Finsbury said it was working with FRP to complete these “as soon as possible”.
Duffy said: “We look forward to welcoming the company into the Finsbury group and providing the resources and investment to develop its full potential.”