LONDON: Cake Box (AIM:CBOX), the UK’s largest retailer of fresh cream celebration cakes, has conditionally agreed to acquire Ambala Foods Limited for a total consideration of £22 million.
The acquisition includes £16 million for Ambala and £6 million for Ambala’s manufacturing facility in Welwyn Garden City.
To partially finance the acquisition, Cake Box plans a placing of 3,888,889 new Ordinary Shares at an issue price of 180 pence per share to raise gross proceeds of £7 million. The remaining funds will come from a new £15.2 million Term Loan Facility and the company’s existing cash reserves. Additionally, Cake Box will conduct a Retail Offer to raise up to £0.2 million from existing retail shareholders in the UK.
Transaction Highlights:
- Ambala, established in 1965, is a leading manufacturer and retailer of Asian sweets (Mithai) in the UK.
- Ambala operates 22 stores (19 owned, 3 franchised) and has been family-run since its inception.
- The acquisition will expand Cake Box’s product range within appropriate stores.
- The Board expects the acquisition to be earnings enhancing immediately post-integration.
- Total consideration will be funded through a £7 million placing, a £15 million Term Loan, and existing cash resources.
Cake Box’s current trading is strong, with year-on-year sales improvement and record festive period sales. The company expects to open more than 25 stores by the end of the year and is confident in meeting market expectations for the fiscal year ending March 31, 2025.
Shore Capital Stockbrokers Limited will act as the sole Bookrunner for the placing, which will be conducted through an accelerated bookbuild process.
Sukh Chamdal, CEO of Cake Box, commented, “We are pleased to announce the acquisition of Ambala Foods Ltd. This strategic acquisition represents a significant opportunity to leverage both brands’ strengths to expand our market presence and accelerate growth. Ambala’s rich heritage complements Cake Box’s values and commitment to quality and innovation.”