Cake Box Holdings PLC (AIM:CBOX) has announced the acquisition of Asian sweets brand Ambala Foods Limited in a £22 million deal.
Adding Ambala to the group expands its product range and creates synergies, the AIM-quoted company highlighted.
Ambala, a family-run business founded in 1965, specialises in Asian confectionery and sweets and the deal includes the product range, 22 stores, and a manufacturing facility in Welwyn Garden City.
To support the deal, Cake Box is raising £7 million of new equity to be run by Shore Capital, placing new shares at 180p each, plus a smaller retail offer.
“This strategic acquisition represents a significant opportunity to leverage the strengths of both brands to expand our market presence and accelerate our growth,” Cake Box chief executive Sukh Chamdal said in a statement.
"Ambala's rich heritage and established customer base complement Cake Box's values and commitment to quality and innovation.
“By adding Cake Box's expertise and resources to Ambala, we aim to create a unique blend of traditional and contemporary delicacies that appeal to a diverse audience, ultimately driving growth and profitability.”
In London, Cake Box shares moved higher – adding around 2% to 193.75p – absorbing the discount and dilution of the incoming placing.