A Scottish packaging firm has bought up a rival company in Cornwall for £4.5million.
Glasgow’s Macfarlane Group Plc, a leading distributor of protective packaging products, has acquired Redruth-based Carters Packaging (Cornwall) Limited.
Carters is a well-established business and the leading distributor of protective packaging in the South West. The acquisition is in line with Macfarlane’s strategy of building its business through a combination of organic and acquisitive growth.
Macfarlane’s wholly-owned subsidiary, Macfarlane Group UK Ltd acquired 100% of Carters for a maximum cash consideration of £4.5million, including a two-year earn-out clause of £1.5million.
Earn-outs are common in acquisition transactions and see the buyer paying a percentage of the sale price up front with the remainder based on future performance.
The expected net assets of the deal on completion will be £0.9million. The consideration will be financed through the Scottish company’s recently extended £30million bank facility.
For the year ended March 31, 2020, Carters generated sales of £4.2million and pre-tax profits of £0.5million. Carters, a second generation-owed business, focuses principally on customers within Cornwall and Devon from its 25,000sq ft facility in Redruth and will benefit from access to Macfarlane’s extended range of protective packaging products and services.
The business has an experienced team of 25 employees, including its two directors, all of whom will remain with the business following the acquisition.
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.”
