Macfarlane acquires Leyland Packaging in £3.25m bolt-on deal
Peter Atkinson: ‘another good acquisition’
Macfarlane Group has acquired packaging distributor Leyland Packaging Company in a £3.25 million deal that will increase the Glasgow-based firm’s customer reach in north-west England.
The deal is described as being in line with Macfarlane’s strategy of building the business through a combination of organic and acquisitive growth.
CEO Peter Atkinson said in a recent results announcement that further deals were imminent as the sector consolidates.
Leyland generated sales of £4.06m and pre-tax profits of £550,000 in the year to the end of December. The initial payment of £2.25m comprises £2m in cash and the sellers will receive 264,382 ordinary shares of 25p each in Macfarlane at a value of £250,000.
The issue price represents the average share price in the 5 days prior to acquisition. The deferred consideration of up to £1m will be payable in cash in Q4 2020 subject to certain trading targets being met for EBITDA in the twelve month period ending 31 August 2020.
Leyland focuses on industrial customers within a close radius of its 37,000 sq. ft. facilities in Leyland. It has 12 employees, all of whom will remain in the business following the acquisition.
Peter Atkinson, Chief Executive of Macfarlane, said:”Leyland is a high-quality packaging business that meets our acquisition criteria and will be earnings-enhancing in its first full year in the Group.
“I am confident that the business will be another good acquisition for Macfarlane improving our geographic coverage in the North-West and extending our customer reach.”