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Back to Case Studies > Fresh Eric's Cake Co Ltd

A family-run cake making company that supplies some of the UK's top cafe chains has doubled its turnover overnight after acquiring a competitor with help from M3.

Fresh Eric's Cake Co was established in 2003 by husband and wife team Eric and Jeanette Watkins with the ambitious goal of taking a slice of the UK's 1.2 billion cake market.

Since then the award-winning company has grown rapidly and now supplies more than 40 clients with its delicious quality cakes, including Fortnum and Mason and national coffee shop chains.

Eric and Jeanette use only fresh ingredients to make their American-style treats which offer a richer and moister taste experience and are additive free. But the couple soon became victims of their own success as demand for their cakes exploded.

"Our sales were growing by 10 per cent each month and we desperately needed to find larger premises in order to continue taking on new business" said Eric."But finding larger premises and adapting them for catering use would have been more costly than acquiring the right business with the equipment and capacity already available. In addition, by buying an existing business we immediately expanded our customer base."

So when London-based Greyfriars Handmade Cakes came to the market due to a retirement sale, Eric and Jeanette saw their chance to acquire the fully equipped, larger premises they needed and double their revenues overnight. But they had no experience of buying a business so they turned to M3 for help and advice.

M3 worked closely with Fresh Eric's Cake Company to help negotiate the deal and advise on best structure, identify funding sources and secure the debt finance they needed to acquire Greyfriars.

"M3 were always on top of the issues" said Eric. "They put together an excellent business plan for us and gave us the confidence we needed that the deal was going to work out. We were so busy running our own business that we didn't have the time or expertise to deal with the banks, M3 pretty much did it all for us."

M3 director Matt Oliver said: "We are delighted to have been able to help Eric and Jeanette increase the size and profitability of their business overnight. Acquiring another company can be a cost-effective shortcut to growth but addressing the concerns of potential funders is crucial when raising acquisition finance."

"This is why it's so important to have an experienced team on board before going down the acquisition route."