Historic Scottish company buys English rival for almost £12 million

“Polyformes is a profitable, growing, well invested company with an experienced management team” – Peter Atkinson, Macfarlane CEO

Macfarlane Group, the Glasgow-headquartered packaging provider, has further grown its presence south of the Border after buying a Bedfordshire foam specialist for almost £12 million.

Founded in 1977, Leighton Buzzard-based Polyformes designs and converts foam primarily for specialist protective packaging applications. It supplies customers in the aerospace, medical, defence and industrial sectors, throughout the UK, and employs around 60 staff.

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Bosses at Macfarlane said there were “significant opportunities” for both businesses to benefit from access to their respective industry expertise, ranges of bespoke protective packaging products and common supplier base. The Scottish group recently said it was “well advanced” with a number of potential bolt-on deals as it continues to benefit from a series of strategic acquisitions while tackling tough market conditions.

Headquartered in Glasgow, Macfarlane Group employs more than 1,000 people at 40 sites, principally in the UK, as well as in Ireland, Germany and the Netherlands.Headquartered in Glasgow, Macfarlane Group employs more than 1,000 people at 40 sites, principally in the UK, as well as in Ireland, Germany and the Netherlands.
Headquartered in Glasgow, Macfarlane Group employs more than 1,000 people at 40 sites, principally in the UK, as well as in Ireland, Germany and the Netherlands.

Peter Atkinson, chief executive of Macfarlane, said: “Polyformes is a profitable, growing, well invested company with an experienced management team that is fully committed to the business. We look forward to working with the team at Polyformes 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.”

Headquartered in Glasgow, Macfarlane Group employs more than 1,000 people at 40 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 with over 70 years’ experience in the UK packaging industry.

The firm is acquiring Polyformes for up to a maximum cash consideration of £11.5m, including an earn-out of up to £4.8m over two years. A further adjustment is due for net assets in excess of £1.6m with the expected net assets on completion being £1.8m, including some £700,000 of net cash. For the year ended December 31, 2023, Polyformes generated sales of £9.3m, with pre-tax profits of £1.4m.

Analysts at house brokerage Shore Capital noted: “Macfarlane is a much more diverse, resilient, profitable and higher-quality business relative to the past five years. Macfarlane retains substantial acquisition firepower.”

In May, the group told investors that it was not budging from its full-year projections despite a “challenging” start to the year. Updating the market as it held its annual shareholder meeting, the firm said first-quarter sales and profits were below the same period in 2023. Despite that slow start to the year, the group’s expectations for the full year were unchanged.

Chairman Aleen Gulvanessian told investors: “On presenting our 2023 results we indicated that the challenging market conditions experienced in the latter part of 2023 would continue into 2024 and this has been the case. We expect some improvement in trading conditions in the second half of 2024 and we have a clear plan of management actions to enable the group to continue its progress.”

In March, the group further extended its reach south of the Border after sealing a £3m-plus takeover deal. Bosses said the acquisition of East Anglia-based Allpack Packaging Supplies would be earnings enhancing and bolster the firm’s protective packaging business.

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