British-based niche plastics products maker Plastics Capital has agreed to acquire Synpac, a manufacturer of high-barrier flexible packaging solutions, for a maximum cash consideration of £3.1m.
The transaction, which will be carried out on a cash and debt-free basis, will see £2.79m cash paid on completion and a further £0.31m will be paid after a period of 12 months.
Based in Yorkshire, UK, Synpac produces vacuum bags and pouches for the food processing industry.
Plastics Capital chairman Faisal Rahmatallah said: “Synpac is a business that meets our acquisition criteria, namely specialty products, high recurring revenues with loyal customers, limited competition and healthy financial performance.
“It is complementary to our other films division businesses and this should enable us to achieve significant synergies in due course through cross selling, operational efficiencies and cost savings.”
Following the completion of the deal, the combined packaging business is expected to increase revenues and the operating margins of the business.
The acquisition is part of Plastics Capital’s strategy to boost shareholder value by purchasing related specialist plastics product businesses.
It is also expected to complement the company’s films division, which comprises Flexipol Packaging and Palagan.
In 2014, Plastics Capital purchased Flexipol, a manufacturer of high-barrier flexible packaging solutions for the food industry, for £10.64m.