REG - Macfarlane Group PLC - Acquisition

MacfarlaneAnnouncement

06/03/2023 07:00

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RNS Number : 9129R  Macfarlane Group PLC  06 March 2023

 

6 March 2023

Macfarlane Group PLC

Acquisition of specialist protective packaging business Suttons

Macfarlane Group PLC ("Macfarlane") is pleased to announce the acquisition of
A.E. Sutton Limited, trading as Suttons Performance Packaging ("Suttons"), a
specialist protective packaging manufacturing business based in
Cambridgeshire.  The earnings enhancing acquisition is in line with
Macfarlane's declared strategy of building its protective packaging business
through a combination of organic and acquisitive growth.

Strategic highlights

·   Founded in 1962, Suttons supplies specialist protective packaging to
customers in the medical, electronics and industrial sectors, throughout
England, from its manufacturing facilities in Chatteris, Cambridgeshire.

·   There are significant opportunities for both Suttons and Macfarlane to
benefit from access to their respective industry expertise, ranges of bespoke
protective packaging products and common supplier base.

·     Suttons has an experienced team of 55 employees, including its two
directors who will both remain with the Group following the acquisition.

·     This earnings accretive acquisition demonstrates Macfarlane's
comprehensive 'buy and build' strategy in delivering further stakeholder
value.

Transaction details

·      Macfarlane's wholly-owned subsidiary, Macfarlane Group UK
Limited, has acquired 100% of Suttons for a maximum cash consideration of
£9.0 million (including an earn-out of up to £2.5 million based on agreed
profit growth targets over two years).

·     A further adjustment is due for net assets in excess of £1.0
million with the expected net assets on completion being £5.7 million,
including £5.0 million of net cash.

·      The consideration is being financed entirely from the Group's
existing £30.0 million bank facility.

·      For the year ended 31 March 2022, Suttons generated sales of
£7.4 million, EBITDA of £1.1 million and pre-tax profits of £0.9 million.

Peter Atkinson, Chief Executive of Macfarlane, said:

"Suttons is a profitable, well invested company with an experienced management
team that is fully committed to the business going forward.  The acquisition
is being funded using our existing bank facility and will be earnings
enhancing.  We look forward to working with the team at Suttons to support
its continued growth and develop opportunities for us to work together to
provide all our customers with a broader portfolio of protective packaging
solutions."

 

 Further enquiries:  Macfarlane Group                                                      Tel: 0141 333 9666
                     Peter Atkinson             Chief Executive
                     Ivor Gray                      Finance Director

                     Spreng Thomson                                                        Tel: 0141 548 5191
                     Callum Spreng                                                         Mob: 07803 970103

 

Legal Entity Identifier (LEI):  213800LVRYDERSJAAZ73

Notes to Editors:

·            Macfarlane Group PLC has been listed on the Premium
segment of the Main Market of the London Stock Exchange (LSE: MACF) since 1973
with over 70 years' experience in the UK packaging industry.

·            Through its two divisions Macfarlane Group services a
broad range of business customers, supplying them high quality protective
packaging which help customers reduce supply chain costs, improve their
operational efficiencies and enhance their brand presentation. The divisions
are:

o  Packaging Distribution - Macfarlane Packaging Distribution is the leading
UK distributor of a comprehensive range of protective packaging products; and

o  Manufacturing Operations - Macfarlane Design and Manufacture who design
and produce protective packaging for high value and fragile products.

·            Headquartered in Glasgow, Scotland, Macfarlane Group
employs over 1,000 people at 37 sites, principally in the UK, as well as in
Ireland, Germany and the Netherlands.

·            Macfarlane Group supplies more than 20,000 customers
principally in the UK and Europe.

·           In partnership with 1,700 suppliers, Macfarlane Group
distributes and manufactures 600,000+ lines across a wide range of sectors,
including: retail e-commerce; consumer goods; food; logistics; mail order;
electronics; defence, automotive and aerospace.

 

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.   END  ACQUOUBROOUORAR