Genesis Crafty to be saved after Tayto boss buys family company saving 260 jobs
Tayto Crisps boss Paul Allen is today set to secure the future of one of Northern Ireland's best-known bakery firms, Genesis Crafty, by buying it over as it goes into administration.
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Mr Allen is understood to be making a private investment worth millions of pounds in McErlain's Bakery, which trades as Genesis Crafty and employs 260 people in Magherafelt, Co Londonderry.
It is a supplier of buns and breads to supermarkets in the UK including Marks & Spencer.
Mr Allen is buying the business in a pre-pack administration deal, with his purchase finalised just as administrators are appointed to the company.
It's expected that administrators EY will be appointed to run the firm - which is still led by the McErlain family - at a court hearing in Belfast this morning.
It's understood that there have been some issues at the firm, with speculation that the presence of six brothers on the board has led to difficulties with handling the pace of its growth.
Pre-pack administrations are a controversial form of deal in which buyers of stricken companies can take over the best parts of a business while discarding its liabilities.
While Mr Allen is best-known for his roles at Tayto parent company Manderley Group, it is believed he is making the purchase in a personal capacity.
It's understood the company's directors, who are mostly members of the McErlain family, have been in discussions about securing investment to secure the company's future for some time.
The company reported pre-tax profits of £484,000 in its latest accounts, down from £558,000 the year before.
However, turnover was up from £15.8m to £16.2m.
Despite making a significant investment in Genesis Crafty, Mr Allen (49) is expected to remain in his post as group chief executive of Tayto Group.
Brian McErlain, one of the six McErlain brothers associated with the firm, is expected to remain in his role as managing director of Genesis Crafty.
The company said it was not able to comment on the deal, while no-one could be reached for comment at EY.
In a strategic report filed with its results for the year ending October 21, 2016, the directors anticipated increased turnover of £16.9m for the year ending 2017.
However, accounts have not been filed.
They said they anticipated improved sales due to "new contracts, new product lines with existing customers in addition to maximising their potential in specific target areas".
Brian, along with brothers Damian and Robert, are listed as directors in the accounts ending October 21, 2016. Their siblings Seamus, Thomas and Adrian are all former directors.
While Paul Allen is making the investment in a personal capacity rather than on behalf of Tayto, the crisps company and its associated firms have been on a major acquisition spree in recent months.
And an associate said his involvement should bode well for McErlain's. "There hasn't yet been a company which he's been involved in acquiring which hasn't then gone on to thrive," they said.
Tayto bought over the trade mark, brand name and machinery of Pop Notch in Maghera, also in Co Londonderry, after it went into administration earlier this year.
The assets of Pop Notch were to transfer to the production premises of Portlebay Popcorn in Devon - a business which Tayto acquired in 2017 after it went into administration.
Also in May this year, Montagu Group, a sister company of Tayto, announced the purchase of a second vending company, Cambridge Vending. Last year it bought vending firm Freedom Refreshments.
Tayto Group remains family-owned and its headquarters are in the famous Tayto Castle in Tandragee, Co Armagh.