Real Good Food sparkles after buying Rainbow Dust for £7.5m

Kasmira Jefford
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Real Good Food will merge Rainbow Dust with its bakery ingredients business Renshaw
Real Good Food has brightened up its ingredients business after buying a company that makes edible glitters and food paint in a deal worth up to £7.5m.

The company, which owns the Whitworths sugar brand, said yesterday it has completed its acquisition of sprinkles-maker Rainbow Dust Colours.

It has paid an initial £4m, with an additional cash consideration of up to £3.5m due to be paid in the form of an earn-out based on gross margin achieved in the 12 months following the deal.

“The increasing popularity of cake decoration has become a global phenomenon,” chairman, Pieter Totte, said.

“We are excited by the growth prospects which this market offers and we will look to build on the knowledge and expertise which both Renshaw and Rainbow Dust possess to become a world leader in the sector,” he added.

Rainbow Dust employs 28 people and operates out of a factory near Preston in Lancashire. Last year, the company reported a turnover of £3.7m and a profit of £1.7m.