In the deal completed yesterday evening (31 March), Glasgow-headquartered packaging giant Macfarlane’s wholly-owned subsidiary, Macfarlane Group UK, acquired 100% of Carters Packaging (Cornwall), the owner of Carters Packaging, for a maximum cash consideration of £4.5m, including an earn-out over two years of £1.5m.

Based in Redruth, Carters focuses principally on customers within Cornwall and Devon from its 2,323sqm premises, which Macfarlane has taken on a lease for.

The company has 25 staff, including its two directors, and all will remain with the business following the acquisition. While Macfarlane will offer support as and when required, there will be no change to Carters’ day-to-day running and its branding and identity will be retained.

Macfarlane said the deal is in line with its strategy of building its business through a combination of organic and acquisitive growth, and that the acquisition will be earnings-enhancing in Carters’ first full year in the group.

The expected net assets on completion are £900,000. The consideration will be financed through the group’s recently extended £30m bank facility.

For the year ended 31 March 2020, Carters generated sales of £4.2m and a pre-tax profit of £0.5m.

Macfarlane chief executive Peter Atkinson told Printweek: “This was one of those acquisitions that we had been working on during 2020.

“We postponed our acquisition activity for obvious reasons through Covid but as we began to come out the other end, we re-engaged with a number of acquisition opportunities – including GWP at the beginning of March, and this one, which we are pleased to have completed this week.

“It fits into our normal profile of a really good quality packaging distribution business; well run, good financial returns and good customer service.

“It’s also in a part of the country that we have relatively weak presence – we try and service that region from our site in Plymouth but to be effective in that part of the world you really need to be based in that locality, so this was a nice opportunity for us.”

He added: “We also hope there are areas we can help Carters with in terms of our purchasing and scale, some of the suppliers we deal with and some of the products we have. They’re running a successful business anyway but if there are opportunities that they can get from the Macfarlane relationship then clearly they will want to benefit from that.”

The acquisition takes Macfarlane’s group headcount to around 1,025.

In its preliminary results for the year ended 31 December 2020, Macfarlane recorded turnover of £230m, up 2.1% on the £225.2m it achieved in 2019, while its pre-tax profit was £13m, up 9.6% on its 2019 figure of £11.9m.

The group’s other recent acquisitions have included Ecopac and Leyland Packaging in 2019 and Armagrip in January 2020.

Macfarlane’s share price jumped by over 4% in early trading this morning to 107p but had since fallen back to 100.84p at the time of writing.