(Alliance News) - Macfarlane Group PLC on Monday announced the acquisition of specialist protective packaging business AE Sutton Ltd, which trades as Suttons Performance Packaging.
Macfarlane acquired the Cambridgeshire-based company for up to GBP9.0 million in cash, including an earn-out of up to GBP2.5 million based on profit growth targets over the next two years.
The company said the acquisition is in-line with its declared strategy of building its protective packaging business and will be earnings enhancing.
In the financial year that ended March 31, Suttons generated sales of GBP7.4 million and pretax profit of GBP900,000. Its adjusted earnings before interest, tax, depreciation and amortization was GBP1.1 million.
The acquisition is being financed entirely from the company's existing GBP30.0 million bank facility.
Macfarlane is a Glasgow-based supplier of protective packaging materials, which it also designs and manufactures. Shares in the firm were up 0.5% at 107.50 pence on Monday afternoon in London.
By Heather Rydings, Alliance News senior economics reporter
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Macfarlane Grp. (MACF)