A Pontypool family gluten-free bakery business was sold to a Cardiff company in a deal potentially worth £25m.
The Lewis family – who are Ultrapharm shareholders – will receive £17m, and potentially over £8m, according to its financial performance until 2021.
The contract of sale is that the rapid rise of the “free from” food market continues – it is estimated that 1.3 million people in the UK now follow a gluten-free diet.
The buyer Finsbury Food Group said it was diversifying into a strong growth market.
Ultrapharm was founded in 1993 in Pontypool and employs over 240 staff across sites in the UK and in Poland.
AIM-listed Finsbury Food Group manufactures cake and bread, to the provision of shops, cafes and restaurants, and has been one of the Ultrapharm customers.
Ultrapharm ceo Marc Lewis is to stay with Finsbury Food as part of the transaction.
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The charity Coeliac UK estimates that 1.3 million people in the UK have a gluten-free diet, including many of those who have other medical conditions such as irritable bowel syndrome (IBS) and non-celiac gluten sensitivity.
The food and drink analyst Alice Baker, market research company Mintel said the rise of gluten-free products is a part of the growing popularity of “free from” products.
“A number of factors, including the media buzz, the celebrity of the approval of the exclusion diets, increased distribution and visibility [in the stores] and sustained development of products… have all contributed to the strong underlying growth,” she said.
Other Welsh manufacturers of “free from” products include the Welsh Hills bakery in Aberdare, rhondda valleys Cynon Taf and brighter Foods in Tywyn, Gwynedd.
John Duffy, ceo of Finsbury Food Group, said the sale gave “another foot in Europe and the us to diversify the market economy”.
Ultrapharm sales were € 19.5 million in 2017, from £ 14.5 m the previous year. Its pre-tax profit last year was £800 000 people.