Glasgow's Macfarlane seals second multi-million-pound English acquisition in just over a month
The group said it was buying Carters Packaging, which is based in Redruth, Cornwall, for £4.5 million. It said the acquisition was in line with its declared strategy of building its business through a combination of organic and acquisitive growth.
Carters focuses principally on customers within Cornwall and Devon from a 25,000-square-foot facility and will benefit from access to Macfarlane’s extended range of protective packaging products and services, the Scots group added.
The business has a team of 25 employees, including two directors, all of whom will remain with the firm following the acquisition.
Macfarlane has acquired 100 per cent of Carters for a maximum cash consideration of £4.5m, including an earn-out over two years of £1.5m. The consideration will be financed through the group’s recently extended £30m bank facility.
For the year to the end of March 2020, Carters generated sales of £4.2m and pre-tax profits of £500,000.
Peter Atkinson, chief executive of Macfarlane, said: “Carters is a well-run, successful protective packaging distributor that meets our strict acquisition criteria and its acquisition will be earnings-enhancing in its first full year in the group.
“I am confident that the business will prove to be an excellent acquisition improving our geographic penetration and extending our customer reach in the south west of England.”
In March, the group announced the takeover of GWP Holdings, the owner of GWP Group, a protective packaging manufacturing and distribution business based in Wiltshire.
Macfarlane is paying a maximum cash consideration of £15.1m for that firm, including an earn-out of £5.1m based on agreed profit growth targets over two years, and a further adjustment for net assets in excess of £1.6m.
For the year to the end of September 2020, GWP generated sales of £13.2m and reported a pre-tax profit of £1.6m.
GWP supplies customers across the UK but mainly within the south west of England from its manufacturing facilities in Salisbury and Swindon.
In February, Macfarlane said it was well placed to benefit when the UK economy begins to recover after booking a “resilient” full-year performance.
During 2020, sales from existing customers benefited from underlying strength in the e-commerce, household essentials and medical sectors as a result of the pandemic, the firm noted.
This was partially offset by weaker demand from those sectors most affected by Covid-19 – automotive, aerospace, high street retail and hospitality.
Sales at the group’s core packaging distribution business lifted 2.6 per cent, year-on-year, to £201.7m, as part of overall turnover of £230m, marking a rise of 2.1 per cent. Profit before tax rose 9.6 per cent to £13m.Headquartered in Glasgow, Macfarlane employs more than 950 people at 33 sites, principally in the UK, as well as in Ireland, Sweden and the Netherlands. It supplies more than 20,000 customers in the UK, Europe and the US.
Sales have also benefited from the 2019 acquisitions of Ecopac and Leyland Packaging, as well as the January 2020 takeover of Armagrip.
A message from the Editor:
Thank you for reading this article. We’re more reliant on your support than ever as the shift in consumer habits brought about by coronavirus impacts our advertisers. If you haven’t already, please consider supporting our trusted, fact-checked journalism by taking out a digital subscription: www.scotsman.com/subscriptions
Want to join the conversation? Please or to comment on this article.