Macfarlane Group, the Glasgow-based packaging, design and distribution firm, announced the acquisition of A.E. Sutton Limited, trading as Suttons Performance Packaging, 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,” said the Glasgow firm.
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.
Macfarlane’s wholly-owned subsidiary, Macfarlane Group UK Limited, has acquired 100% of Suttons for a maximum cash consideration of £9 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,” said Macfarlane.
“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.”
Macfarlane CEO Peter Atkinson 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.”