Real Good Food PLC (LON:RGD) has sold its Haydens Bakery business to Icelandic food giant Bakkavor Group PLC (LONBAKK) for £12mln.
Haydens is one of Real Good Foods original divisions and bakes premium pies, tarts and crumbles, as well as pastries and doughnuts. The AIM-quoted firm has been selling off some of its assets recently as it looks to stabilise after a tough couple of years which saw it post a string of profit warnings and overhaul its management.
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Last year, Haydens, excluding the Chantilly Patisserie business which is not part of the deal, generated £31.3mln in revenue and broke even at profit before tax.
Real Good Food will use the cash to pay down some of its debt, with the remainder being split between funding the group's working capital requirements and the potential repayment of external shareholder debt.
“This disposal marks an important next step in the restructuring and performance improvement of Real Good Food and is line with our turnaround plan for the group,” said chief executive Hugh Cawley.
“Given the sizeable areas of common interest, we believe that Haydens and its staff will prosper better in partnership with Bakkavor.”