Glasgow packaging group Macfarlane seals multi-million-pound deal in fresh push south

Latest transaction follows three acquisitions undertaken in the prior 12 months.

Headquartered in Glasgow, Macfarlane Group employs more than 1,000 people at 39 sites, principally in the UK, as well as in Ireland, Germany and the Netherlands.

Macfarlane Group, the Glasgow-headquartered packaging provider, has further extended its reach south of the Border after sealing a £3 million-plus takeover deal.

Bosses said the acquisition of East Anglia-based Allpack Packaging Supplies would be earnings enhancing and bolster the group’s protective packaging business. Last month, Macfarlane said it was “well advanced” with a number of potential bolt-on deals as it continues to benefit from a series of strategic acquisitions and tackle tough market conditions.

Allpack supplies protective packaging products to customers across a wide range of sectors from its warehouse facilities near Bury St Edmunds. It has ten employees, including three directors, all of whom will remain with the business following the acquisition.

Macfarlane's wholly-owned subsidiary, Macfarlane Group UK, is buying 100 per cent of Allpack for a maximum cash sum of £3.25m, including an earn-out of up to £750,000 based on agreed profit growth targets over one year. A further adjustment is due for net assets in excess of £400,000 with the expected net assets on completion being £2.2m, including £1.9m of net cash. The deal is being financed entirely from the Scottish firm’s existing bank facility.

Chief executive Peter Atkinson said: “This latest transaction follows three acquisitions undertaken in the prior 12 months, and clearly demonstrates further progress in executing against our buy and build strategy. Allpack is a well-run, successful protective packaging distributor with an experienced management team. The addition of Allpack to the Macfarlane group further strengthens our ability to serve customers in East Anglia.”

Analysts at house brokerage Shore Capital noted: “Allpack is a specialist in protective packaging solutions across a wide range of sectors, a good strategic and complementary fit within Macfarlane’s manufacturing operations - in line with its key ‘buy & build’ growth strategy.”

Headquartered in Glasgow, Macfarlane Group employs more than 1,000 people at 39 sites, principally in the UK, as well as in Ireland, Germany and the Netherlands. The business has been listed on the main market of the London Stock Exchange since 1973. Its recent full-year results showed that adjusted group profit before tax grew to £25.8m, from £23.5m the year before, even though group revenue dipped 3 per cent to £280.7m.