Under the terms of the deal, which was completed on Saturday (6 July), Glasgow-headquartered Macfarlane’s wholly owned subsidiary, Macfarlane Group UK Ltd, has acquired 100% of Polyformes for a maximum cash consideration of £11.5m, including an earn-out of up to £4.8m based on agreed profit growth targets over two years.
A further adjustment is due for net assets in excess of £1.6m with the expected net assets on completion being £1.8m, including £700,000 of net cash.
The consideration is being financed entirely from Macfarlane’s existing bank facility. The group said it continues to operate well within its bank facilities of £35m and related covenants, which are committed until December 2025.
The packaging giant said the earnings-enhancing acquisition demonstrated further progress in its strategy to build the group’s protective packaging business through a combination of organic and acquisitive growth.
Founded in 1977, Polyformes designs and converts foam primarily for specialist protective packaging applications and supplies customers in the aerospace, medical, defence and industrial sectors, throughout the UK.
Based in Leighton Buzzard, the business employs 60 staff including its three directors, who will all remain with the group following the acquisition.
There are no plans to change the Polyformes name and Macfarlane said there were significant opportunities for both companies to benefit from access to their respective industry expertise, ranges of bespoke protective packaging products, and common supplier base.
For the year ended 31 December 2023, Polyformes generated sales of £9.3m, with EBITDA of £1.5m and pre-tax profits of £1.4m.
Peter Atkinson, chief executive of Macfarlane, said: “Polyformes is a profitable, growing, well invested company with an experienced management team that is fully committed to the business.
“We look forward to working with the team at Polyformes to support its continued growth and develop opportunities for us to work together to provide our customers with a broader portfolio of protective packaging solutions.”
In March Macfarlane Group acquired Allpack Packaging Supplies, an East Anglian business that supplies protective packaging products to customers across a wide range of sectors
The 1,000-plus staff group’s share price was up 3.6% on yesterday’s close to 121.20p at the time of writing just before lunchtime today (52-week high: 147.50p, low: 98.38p).
