Glasgow’s Macfarlane Group seals ‘unique and exciting’ £18 million takeover of Scottish rival
Macfarlane Group, the Glasgow packaging provider, has kicked off the new year with the £18 million takeover of a Scottish peer that employs more than 150 workers.
Pitreavie Group, which operates from Aberdeen, Glenrothes and two locations in Cumbernauld, where it is headquartered, manufactures and distributes protective packaging, supplying customers in the food and drink, energy, electronics and industrial sectors, chiefly in Scotland.
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Hide AdBosses at Macfarlane Group, which already employs more than 1,000 people at 40 sites, pointed to “significant opportunities” for the growth of both businesses thanks to the range of bespoke protective packaging products available and a common supplier base. Any longer term impact on the Pitreavie workforce is unknown at this stage.


Alongside organic growth, Macfarlane has flexed its muscles via a series of bolt-on acquisitions, both in the UK and mainland Europe, typically undertaking two or three such deals each year. Under the latest agreement the company’s wholly-owned subsidiary, Macfarlane Group UK, has acquired 100 per cent of Pitreavie for a maximum cash sum of £18m, including an earn-out of up to £4m based on agreed profit growth targets over two years. A completion adjustment, payable to Macfarlane, is estimated to be £3.4m with net debt inherited of £4m. The deal is being financed entirely from Macfarlane’s existing bank facility. The group said it continued to operate “well within” its recently-improved banking facility of £40m and related covenants, which are committed until November 2027.
Chief executive Peter Atkinson said: “Pitreavie is a fast-growing, well-invested company with an experienced management team that is fully committed to the business. The acquisition represents a unique and exciting opportunity to grow our business in Scotland and provide in-house supply to our businesses in the north of England.
“We look forward to working with the team at Pitreavie to support its continued growth and develop opportunities for us to work together to provide our customers with a broader portfolio of protective packaging solutions.”
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Hide AdFor the year ended December 31, 2024, Pitreavie generated sales of £24.8m, with adjusted underlying earnings (Ebitad, or earnings before interest, taxes, depreciation and amortisation) of £2.5m and adjusted pre-tax profits of £1.3m. Pitreavie - founded in 2005 - currently employs 159 people across its four locations. It operates a corrugated box manufacturing plant, newly opened in 2020, a specialist protective packaging manufacturing and assembly facility, a protective packaging distribution business and a temperature-controlled packaging operation, all supported by in-house design capability.


The blend of businesses Pitreavie operates is said to complement both the distribution and manufacturing operations of Macfarlane.
“Pitreavie has an excellent senior management team that has been instrumental in driving the growth of the business in recent years,” Macfarlane added. “They will remain with the business post-completion to support the continued growth of both Macfarlane and Pitreavie. This earnings-enhancing acquisition further demonstrates the effectiveness of Macfarlane’s ‘buy and build’ strategy in delivering stakeholder value.”
Analysts at house brokerage Shore Capital noted: “We would also highlight that there is limited customer concentration and the food and drink sector, which is a strong sector of the economy in Scotland, is an important part of the Pitreavie business - Macfarlane is not currently exposed to the sector.
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Hide Ad“Following the acquisition, Macfarlane has a considerable opportunity to accelerate its penetration of the market in Scotland as well as provide in-house supply to its north of England businesses, given the strong Pitreavie manufacturing capability and capacity.”
Towards the end of November, the group told investors that its performance for 2024 would be broadly in line with its full-year expectations. Revenue in the year to date was said to be 4 per cent below the same period a year earlier, with “continued challenging market conditions” resulting in weaker volumes and lower pricing impacting most sectors.
However, it noted that those impacts were being offset by improved new business performance, “effective management of pricing and costs” and the completion of two acquisitions during the period. At the time, it said it continued to progress its “strong acquisitions pipeline”.
It also warned that the increase in employers’ national insurance rates and national minimum wage announced in the UK Budget in October would increase its costs by about £1.5m annually from this April.
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Hide AdAleen Gulvanessian, chair of Macfarlane Group, told investors: “As outlined in our interim results, the management team is responding effectively to the market headwinds. Our strong balance sheet gives us confidence we can continue to execute accretive acquisitions.”
Those interim numbers, released last August, revealed an 8 per cent slide in revenues to £129.6m. Profit before tax fell 3 per cent to £9.7m in the six months to the end of June, compared with the same period a year earlier.
The firm, which has been listed on the stock market for more than 50 years, said group adjusted operating profit as a percentage of revenue improved to 9.7 per cent, from 9.1 per cent.
Atkinson told The Scotsman at the time: “We have the recent acquisitions feeding through and have more to come. We have probably turned down about 20 potential acquisitions so far this year so the pipeline of opportunities is very strong and we would be very hopeful of more acquisition activity being announced in the first part of 2025.”
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Hide AdFinance director Ivor Gray pointed to a strong cash position at the business “providing us with firepower” and said the pension scheme was “well managed” with the company not needing to put more cash in.
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