McCambridge acquires troubled Inter Link firm

Bakery firm McCambridge has acquired the troubled British cake-maker Inter Link Foods in a £75 million (€111.5 million) deal in which it will assume the group's £65 million debt.

The transaction has the potential to increase McCambridge's turnover threefold and it follows abortive takeover talks last month which broke down because of a dispute over a debt writedown.

Given Inter Link's association with a large bakery operation in Poland, McCambridge hopes to use the acquisition as a springboard for expansion in Europe.

Controlled by Michael McCambridge, grandson of the founder of the business, it has annual sales of £32 million and around 1,000 staff.

Irish-owned but run by an unlisted UK plc, the company has made 10 acquisitions in Ireland and Britain since 1999.

Inter Link had sales of some £62.5 million last year but its viability came into question in recent months when it issued a series of profit warnings.

McCambridge acquired the business from accounting firm Deloitte & Touche, which was appointed administrator to the company after its shares on the Alternative Investment Market (AIM) were suspended.

"The acquired businesses have excellent people, famous brands and strong products," said Michael McCambridge.

"It is my intention to ensure that the businesses and over 90 per cent of the jobs will be protected. The two businesses fit very well together, both in product areas and geographically, and there are attractive synergies.

"Importantly, the combination creates an exciting platform for achieving accelerated growth into the future."

McCambridge said that combining the workforce, products and operations of both groups would deliver considerable benefits to the enlarged organisation. The deal greatly increases the size of the McCambridge business, giving opportunities to generate economies of scale in production, purchasing and distribution.

McCambridge said the deal ends uncertainty over the future of Inter Link's operations, its workforce and ongoing relationships with its suppliers and customers.

The company said it had guaranteed the future of the Inter Link businesses, providing a solid foundation to develop further.

The deal comes more than two months after discussions between the two companies began.

McCambridge claimed in May that it was being thwarted in its efforts to advance its takeover approach for Inter Link. In a dispute over access to its books, it threatened to withdraw its interest if Inter Link's board did not facilitate due diligence.

That disagreement over the confidentiality of the process was resolved, only to be followed by a further dispute over Inter Link's debts.