Glasgow-based packaging firm Macfarlane Group has announced the sale of its Macfarlane Labels Limited division to The Reflex Group Limited for £6.4 million.
Macfarlane said the sale will allow the group to focus resources on growing its protective packaging businesses in the UK and Europe.
The sale includes subsidiaries Macfarlane Group Ireland (Labels & Packaging) Limited and Macfarlane Group Sweden AB and was completed on December 31, 2021.
Macfarlane Labels designs and prints self-adhesive and resealable labels, principally for fast-moving consumer goods (FMCG) companies.
“The consideration for Macfarlane Labels is £6.4m, which will broadly align with net asset value,” said Macfarlane.
“95% of the consideration was paid on completion with the balance payable within three months of completion, subject to any adjustment following finalisation and agreement of the net asset value of Macfarlane Labels at the completion date.
“The group’s net bank debt at 30 November 2021 was £3.2m (30 June 2021: £8.7m).
“The group’s bank facility of £30m is in place until December 2025.
“For the year ended 31 December 2020, Macfarlane Labels generated profit before tax of £0.3m, and as at 31 December 2020 had gross assets of £15.1m.
“Macfarlane Labels employs 109 employees who will remain in the business after the sale.
“The proceeds from the sale will be strategically invested in the continuing growth of Macfarlane’s protective packaging businesses.”
Macfarlane CEO 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.
“The sale will allow the group to focus resources on growing our protective packaging businesses both in the UK and Europe.”