Completed yesterday (12 March), Macfarlane said the earnings-enhancing deal further progresses its strategy to build its protective packaging business through a combination of organic and acquisitive growth.

The transaction has seen Macfarlane’s wholly-owned subsidiary, Macfarlane Group UK Ltd, acquire 100% of Allpack for a maximum cash consideration of £3.25m, including an earn-out of up to £0.75m based on agreed profit growth targets over one year.

A further adjustment is due for net assets in excess of £0.4m with the expected net assets on completion being £2.2m, including £1.9m of net cash.

The consideration is being financed entirely from Macfarlane’s existing bank facility.

With warehouse facilities near Bury St Edmunds, Allpack has 10 staff, including three directors. They will all remain with the business following the acquisition.

Macfarlane said there are opportunities for Allpack’s customers to benefit from access to its extensive range of protective packaging products and services.

For the year ended 31 December 2023, Allpack generated sales of £3m, with EBITDA and pre-tax profit of £0.6m.

Macfarlane chief executive Peter Atkinson said: “This latest transaction follows three acquisitions undertaken in the prior 12 months, and clearly demonstrates further progress in executing against our buy and build strategy.

“Allpack is a well-run, successful protective packaging distributor with an experienced management team. The addition of Allpack to the Macfarlane Group further strengthens our ability to serve customers in East Anglia. We look forward to working with the team at Allpack to support its continued growth.”

In its preliminary results released last month for the year ended 31 December 2023, Glasgow-headquartered packaging giant Macfarlane recorded turnover of £280.7m, down 3% from the £290.4m it achieved in its 2022 results, but its pre-tax profit climbed by 2%.