Macfarlane acquires protective packaging specialist GWP

Richard Stuart-Turner
Monday, March 1, 2021

Packaging giant Macfarlane Group has acquired GWP Holdings Ltd, the owner of protective packaging manufacturing and distribution business GWP Group.

Atkinson: "GWP is a company that we have admired for quite a long time"
Atkinson: "GWP is a company that we have admired for quite a long time"

Glasgow-headquartered Macfarlane said the acquisition is in line with its declared strategy of building its protective packaging business through a combination of organic and acquisitive growth.

In the deal, which was completed late on Friday (26 February), Macfarlane’s wholly-owned subsidiary Macfarlane Group UK Ltd acquired 100% of Wiltshire-based GWP for a maximum cash consideration of £15.1m.

This included an earn-out of £5.1m based on agreed profit growth targets over two years, and a further adjustment for net assets in excess of £1.6m, with the expected net assets on completion being £4.3m, including £3.8m of net cash. The consideration will be financed through the group’s recently extended £30m bank facility.

GWP supplies customers across the UK but mainly within the South West of England from its manufacturing facilities in Salisbury and Swindon. For the year ended 30 September 2020, the business recorded sales of £13.2m, EBITDA of £2.1m and a pre-tax profit of £1.6m.

The company has 107 staff, including its six directors. Five of the directors will remain with the group, along with the rest of the staff, and will continue to head up the day-to-day running of GWP. The business will remain at its current premises and its identity and branding will also be retained.

The acquisition takes Macfarlane’s group headcount to just over 1,000.

Macfarlane chief executive Peter Atkinson told Printweek: “GWP is a company that we have admired for quite a long time. It was in our pipeline of opportunities and it was all about timing; when the directors decided that they wanted to sell the business we were very keen to pursue it.

“Because it’s such a good quality business, we don’t plan to make any immediate changes because there’s no need to, it’s progressing really well.”

He added: “There are some product areas that we are involved in but where GWP have got a degree of expertise that we will benefit from. And on a reciprocal basis, there are product areas where we’ve got expertise that they will benefit from.

“As we get to know each other better through the earn-out process, we’ll be looking at opportunities to share product knowledge and product experiences and bring these to our respective companies.”

In its preliminary results for the year ended 31 December 2020, which were released on Thursday, Macfarlane recorded turnover of £230m, up 2.1% on the £225.2m it achieved in 2019, while its pre-tax profit was £13m, up 9.6% on its 2019 figure of £11.9m.

The group’s other recent acquisitions have included Ecopac and Leyland Packaging in 2019 and Armagrip in January 2020.

Macfarlane’s share price jumped by over 10% in early trading this morning to a 52-week high of 100.72p and stood at 98.29p at the time of writing.

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