Cake Stuff – A Sweet Success Story

Cake Stuff was one of the UK’s leading online retailers of cake decorating supplies, with a large and loyal customer base across the UK and Europe. Founded in 1979 and based in Lesmahagow, Scotland, the business had grown rapidly over the last 10 years through its eCommerce expansion, offering thousands of specialist products to home bakers, cake designers and small baking businesses. By 2021, the company had become a trusted brand in the cake decorating space and was attracting attention from industry players.

Deciding to Sell the Business

After a decade of strong growth, the owners of Cake Stuff began to consider their long-term future. With the business performing well and the market remaining buoyant, they saw an opportunity to exit at a time when valuation multiples in the eCommerce sector were strong. Their aim was to achieve maximum value while ensuring the business would continue to thrive under new ownership.

Recognising that any potential buyer might be a competitor, the owners were conscious of maintaining confidentiality and avoiding any disruption to day-to-day operations. With this in mind, they sought expert support to manage the process from start to finish.

Working with Business Partnership

The owners appointed Business Partnership to handle the sale and lead negotiations on their behalf. With deep experience in managing the sale of eCommerce businesses, Business Partnership provided strategic advice, prepared the business for market, and ran a targeted, confidential marketing campaign.

When Create Better Group, a Dr Oetker company, expressed interest, Business Partnership took the lead in managing the dialogue. By acting as a professional intermediary, they ensured that commercial sensitivities were protected and that the Cake Stuff team could focus on keeping the business performing strongly, without becoming distracted by complex and time-consuming negotiations.

Throughout the process, Business Partnership managed buyer engagement, prepared documentation, supported the due diligence phase, and steered the transaction through to completion. Their involvement allowed the owners to remain hands-off, confident that their interests were being represented at every stage.

Outcome

The business was acquired by Create Better Group at a 6x EBITDA multiple. Thanks to the space and support provided by Business Partnership during negotiations, the Cake Stuff team delivered their best-ever quarter immediately prior to completion; an achievement that further reinforced the value of the business at the point of sale.

The sale marked a successful exit for the owners, who were able to transition the business to a well-resourced industry player committed to growing the Cake Stuff brand.

We knew that selling to a competitor would be sensitive and time-consuming, so we wanted a professional to lead the process from start to finish. Business Partnership gave us the confidence to step back from the negotiation table and stay focused on running the business. As a result, we had our best-ever quarter while the deal was being finalised – something we couldn’t have done if we were tied up in meetings and paperwork.

The final deal exceeded our expectations and was structured to protect the business and our people. We wouldn’t hesitate to recommend Business Partnership to any business owner thinking about an exit.

Alan & Jean, Founders