Protective packaging manufacturer Macfarlane has acquired UK-based packaging distributor One Packaging in a bid to bolster its packaging distribution business.
The acquisition is valued at £2.75m, including £2m in cash from Macfarlane's existing borrowing facilities. The deferred consideration of up to £750,000 will be paid in a combination of cash and ordinary shares in Macfarlane in the third quarter of 2016.
This acquisition is in line with One Packaging's business plan to improve turnover and operating profits by more than 25% by the end of the earn-out period.
Founded in 2003, One Packaging will transfer its employees to Macfarlane, as part of the deal.
One Packaging generated £400,000 in operating profits before non-recurring costs on turnover of £4.9m in the financial year ending 31 July 2014.
Macfarlane CEO Peter Atkinson said: "One [Packaging] is a good quality, successful packaging distributor. This acquisition demonstrates our continuing commitment to the strategy of developing our leadership position in the UK market for the distribution of protective packaging.
"We are delighted that Greg Almond will remain with the business. His considerable knowledge and expertise will complement the existing Macfarlane business in the East Midlands area."
The acquisition follows Macfarlane's purchase of Network Packaging in September 2014 for £7.5m.
Headquartered in Glasgow, Scotland, Macfarlane employs more than 730 people across 25 sites, principally in the UK and Ireland.
The company's Macfarlane packaging business distributes a range of protective packaging products and the labels' unit designs and prints quality self-adhesive and re-sealable labels, principally for FMCG companies.