Packaging and label company Macfarlane Group has divested its labels division to The Reflex Group, a privately owned company, for a consideration of $8.6m (£6.4m).

The deal closed on 31 December 2021. The division includes Macfarlane Labels, Macfarlane Group Ireland (Labels & Packaging) and Macfarlane Group Sweden, which are collectively known as Macfarlane Labels.

The division designs and prints self-adhesive and resealable labels, serving fast-moving consumer goods companies.

For the year ended 31 December 2020, Macfarlane Labels generated profit before tax of $0.4m (£0.3m) and gross assets valued at $20.41m (£15.1m).

The company will use the proceeds from this deal to support the growth of its protective packaging businesses.

Macfarlane chief executive Peter Atkinson said: “Macfarlane Labels has been a long-standing part of the group. We believe that its sale to Reflex, with their well-established position and scale in the labels market, creates the best opportunity for Macfarlane Labels to develop.

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“The sale will allow the group to focus resources on growing our protective packaging businesses both in the UK and Europe.”

Reflex specialises in manufacturing labels as well as flexible packaging and has more than 800 employees, mainly in the UK.

The company will retain 109 employees from Macfarlane Labels following the acquisition.

Headquartered in Glasgow, Scotland, Macfarlane Group reported last month that its sales revenue grew by 25% for the trading period to 31 October, compared with the same period of last year.

The company employs more than 900 people at 36 sites and supplies more than 20,000 customers in the UK and Europe in partnership with 1,700 suppliers.

As of 30 November 2021, the group’s net bank debt was £3.2m, compared to £8.7m on 30 June 2021.