Derby-based AC Labels went into administration on 11 March, with its 50 staff made redundant as a result. 

Adrian Steele, managing director of Cannock-based Mercian Labels, said: "AC Labels had a fantastic reputation in the marketplace as a market leader in complex variable information labels."

He added that the company would establish a new operation in Derby specifically to serve that market.

Mercian Labels sales director Hugo Gell said: "We have been looking for a complementary business that was security related to add to our growing portfolio."

He added Mercian Labels hoped to re-employ some of the staff made redundant by AC Labels.