The deal, which was completed today (17 May), is in line with the Glasgow-headquartered packaging giant’s strategy of building its protective packaging business in Northern Europe through a combination of organic and acquisitive growth, and is immediately earnings enhancing.

A protective packaging distribution business based in Eppelheim near Heidelberg, PackMann has been established for nearly 28 years and supplies customers across Germany and neighbouring countries.

The company employs 112 staff, including its founder and director Frank Westermann and director Volker Thorn, who will both remain with the business following its acquisition.

Macfarlane has acquired 100% of PackMann for a maximum cash consideration of €8.625m (£7.29m), including an earn-out of €1.75m based on agreed profit growth targets over two years and €600,000 of net bank debt.

The consideration will be financed through the group’s existing £30m bank facility. For the year ended 31 December 2021, PackMann generated sales of €12.8m, EBITDA of €900,000, and pre-tax profits of €800,000.

Macfarlane Group said there are significant opportunities for customers of both PackMann and Macfarlane to benefit from access to their respective ranges of protective packaging products and services.

“PackMann is Macfarlane’s first acquisition outside the UK in recent years and I am delighted that we have secured this excellent business with its strong history of profitability and an experienced management team,” said Macfarlane chief executive Peter Atkinson.

“This transaction strengthens our ‘Follow the Customer’ strategy, giving us a solid platform from which to accelerate the growth of our protective packaging business in Northern Europe.”

Last week Macfarlane Group held its Annual General Meeting (AGM), at which it provided a positive trading update covering 2022 to date.

The company’s share price stood at 118.78p at the time of writing, down 1.02% on yesterday’s close.