The acquisition of the company, which is based near Aylesbury in Buckinghamshire, was completed last Thursday (2 May). Glasgow-headquartered Macfarlane said the deal is in line with its strategy of building its business through a combination of organic and acquisitive growth.
Macfarlane chief executive Peter Atkinson said he expects the acquisition to be earnings-enhancing in its first full year in the group.
He told PrintWeek: “We have known the owner of Ecopac for a long time, and we’d transacted well on the [2016 acquisition of Colton Packaging in Teesside, which he also owned], so it was logical when he was looking to sell this business that we came together.
“Ecopac is based between Aylesbury and Bicester. We have a site in Milton Keynes and a site in Reading, both of which are very full at the moment, so we would look to retain this business within and servicing the Aylesbury region and operating in the gap between our Milton Keynes and Reading sites.”
He added: “The acquisition brings a whole bunch of new customers into Macfarlane, which is positive, and it allows us to improve our penetration of the geographic area around the Oxford/Aylesbury region, which we’re not currently that strong in.
“It also enables us to do some sharing of knowledge and experience, particularly on suppliers and product ranges. A number of our suppliers overlap but there are a number of suppliers that differ, so it allows us to work with those suppliers and see where we can get the best of both worlds.”
Ecopac’s 21 staff will all remain with the business at its existing leased 5,574sqm premises and the company’s branding will be retained.
“Because our acquisition strategy is all about buying high quality businesses, part of what we’re buying is the brand. So we will continue with the Ecopac brand, operating under the Macfarlane umbrella,” said Atkinson.
For the year ended 31 March 2018, Ecopac generated sales of £6m and pre-tax profits of £500,000. Macfarlane’s wholly-owned subsidiary, Macfarlane Group UK Limited, has acquired 100% of Ecopac for a maximum cash consideration of £3.9m, including an earn-out of £800,000.
“We will be supporting and helping them but not overly interfering during the first year to ensure they can maximise on their earn-out,” said Atkinson.
“But certainly, because it’s a good quality business, we wouldn’t be looking to make any changes to the team there; it’s a good team with good leadership and we’re looking forward to working closely with them.”
The acquisition takes Macfarlane Group’s headcount up to around 970. Staff are based across 30 sites, primarily in the UK but also in Ireland and Sweden, and serve more than 20,000 customers in the UK, Europe and the US.
Atkinson said Macfarlane has got “a pipeline of acquisitions”.
“There are a couple of developments that are pretty well advanced. If everything goes to plan, we will hopefully be able to announce another acquisition by the time we get to early/middle second half of the year.”
Macfarlane Group posted its ninth consecutive year of growth in 2018 with a turnover for the 12 months to 31 December boosted by 11% on the previous year to £217.3m.
The company's share price was up by 3.6% in early trading to 104.55p but had settled down to 103.5p at the time of writing.