Cake Box Holdings has announced its intention to acquire Ambala Foods Limited, a well-established manufacturer and retailer of Asian sweets with deep roots in British Asian communities dating back to 1965.
The deal comes amid strong organic growth for Cake Box, which is also expanding the number of its own brand stores.
The acquisition, valued at £22 million, represents a strategic expansion for Cake Box, which has built its reputation as the UK’s largest retailer of fresh cream celebration cakes.
The deal includes £16 million for Ambala itself and an additional £6 million for Ambala’s manufacturing facility located in Welwyn Garden City.
Cake Box will fund the deal through a proposed placing at an issue price of 180 pence per share, aiming to raise gross proceeds of £7 million before expenses. The remainder of the acquisition cost will be covered by a new £15.2 million Term Loan Facility, with any balance coming from Cake Box’s existing cash reserves.
Additionally, the company is undertaking a Retail Offer to existing retail shareholders in the UK with the goal of raising up to an additional £0.2 million.
The acquisition of Ambala Foods brings 22 stores into the Cake Box fold, comprising 19 owned stores and three franchised locations. Ambala, which has remained family-run since its inception, specialises in Mithai, traditional Asian sweets.
“We are pleased to announce the acquisition of Ambala Foods Ltd, a leading manufacturer and retailer of Asian confectionery in the UK since 1964. This strategic acquisition represents a significant opportunity to leverage the strengths of both brands to expand our market presence and accelerate our growth,” said Sukh Chamdal, Chief Executive Officer of Cake Box.
“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.
“We are confident that this acquisition will resonate with Cake Box’s existing customer base and to its commitment to quality products and customer service.”
Recent Cake Box trading
The acquisition comes after a period of robust trading for Cake Box. In a trading statement released alongside the acquisition news, Cake Box has reported continued year-on-year improvement in sales since its interim results to 30 September 2024 and celebrated record sales during the recent festive period.
Furthermore, Cake Box remains on track to open more than 25 new stores by the end of its financial year on 31 March 2025.
The board has expressed confidence that Cake Box will meet market expectations for the current financial year, suggesting that the positive trading conditions have continued despite the broader economic challenges facing UK retailers.