Glasgow packaging firm seals first deal after Covid

GLASGOW-BASED Macfarlane Group has clinched its first acquisition since the pandemic took hold, lifting shares up more than six per cent.

The acquisitive packaging company has struck a deal to take over GWP Group of Wiltshire, a protective packaging manufacturing and distribution business, for up to £15.1 million in cash.

It is the first deal to be sealed by Macfarlane since the addition of Armagrip in January 2020, and the fourteenth to be completed by chief executive Peter Atkinson since he joined the group in 2003.

The firm is hopeful of making a further acquisition this year.

Macfarlane Group UK Limited, a wholly-owned subsidiary of the listed Scottish company, has acquired 100% of GWP, with the deal including an earn-out of £5.1m based on agreed profit targets over two years.

The GWP team of more than 100 staff, including five directors, will transfer to Macfarlane, which had more than 900 staff across the UK prior to the deal. One of the GWP directors will exit.

GWP made a pre-tax profit of £1.6m on sales of £13.2m for the year ended September 30.

Mr Atkinson said: “GWP is a profitable, growing, well-invested company with an experienced management team that is fully committed to the business going forward.

“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.”

Last week, Macfarlane posted a near-10% rise in pre-tax profits to £13m for 2020, with turnover rising 2.1% to £230m as the firm benefited from the dramatic shift to e-commerce seen during the pandemic.

Shares in Macfarlane Group closed up 5.9p at 97.7p last night.