Macfarlane acquires south west firm in £15m deal
Peter Atkinson: well invested
Packaging company Macfarlane Group has acquired GWP Holdings, the owner of GWP Group, a protective packaging manufacturing and distribution business based in Wiltshire.
The £15.1 million acquisition is in line with Macfarlane’s declared strategy of building its protective packaging business through a combination of organic and acquisitive growth.
Macfarlane’s wholly-owned subsidiary, Macfarlane Group UK, has acquired 100% of GWP in a cash deal that includes an earn-out of £5.1m based on agreed profit growth targets over two years.
The deal will be financed through the group’s recently extended £30m bank facility. For the year ended 30 September 2020, GWP generated sales of £13.2m, EBITDA of £2.1m and pre-tax profits of £1.6m.
GWP supplies customers across the UK but mainly within the South West of England from its manufacturing facilities in Salisbury and Swindon. There are significant opportunities for both GWP and Macfarlane to benefit from access to their respective ranges of protective packaging products and services.
The business has 107 employees, including its six directors, five of whom will remain with the company.
Peter Atkinson, chief executive of Macfarlane, said: “GWP is a profitable, growing, well invested company with an experienced management team that is fully committed to the business.
“The acquisition will be funded using bank debt and will be earnings enhancing. We look forward to working with the team at GWP to support its continued growth and develop opportunities for us to work together to provide all our customers with a broader portfolio of value-add and sustainable protective packaging solutions. ”
Macfarlane last week posted a 9.6% rise in annual profit before tax to £13m on a 2.1 % increase in sales to £230m.
The board is proposing a final dividend of 1.85p per share, amounting to a full year dividend of 2.55p per share, compared to the prior year dividend of 0.69p per share which was impacted by the cancellation of the proposed final dividend of 1.76p per share, as one of the key Covid-19 cash conservation measures.