Macfarlane acquires Nottingham packaging firm

By Max Goldbart, Monday 18 September 2017

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Macfarlane Group has acquired Nottinghamshire-based Greenwoods Stock Boxes (GSB), its first and potentially last 2017 acquisition.


Atkinson: acquisition "benefits us in a number of ways"

Likely to be completed at the end of this week, the deal, worth around £16.8m, brings GSB’s packaging distribution arm, its smaller manufacturing plant and also subsidiary Nottingham Recycling Limited (NRL) into the Macfarlane fold. NRL focuses on the collection and baling of corrugated materials and makes up less than £1m of GSB's overall circa-£14m sales. 

The deal includes a cash payment of £7.5m, the issuing of £6m of shares to GSB with said shares subject to a two-year lock-in arrangement and, as with prior Macfarlane acquisitions, a further £3.3m conditional on certain trading targets being met in the first 12 months.

The news comes off the back of a healthy set of half-year results published last month by the £180m group. Half-year sales increased by around 10% year-on-year to £89.8m, with pre-tax profit up by more than a quarter. 

Macfarlane chief executive Peter Atkinson said the deal had been in the “pipeline of Macfarlane acquisitions” for around two-and-a-half-years and that there would be little issue with customer overlap.

“We always talk about having a pipeline of acquisitions at any moment in time and Greenwoods has been in that pipeline,” said Atkinson.

“We talked to them a long time ago and built up a relationship through that and the events of last week finalised the transaction. When you’re dealing with these it’s important to build a rapport, build a relationship so we can ensure we are transacting with the right partners.”

A spokesman for GSB said the business was "very happy" with the deal.

GSB managing director John Greenwood will remain in his role at the 65-staff business and will oversee a period of integration over the next 12 months, at which point his position will be reviewed.

Founded around 50 years ago by Greenwood’s late father Don Greenwood, GSB manufactures and distributes a range of packaging products, including bespoke and die-cut boxes, operating from two sites, distribution in Nottingham and manufacturing in nearby Melton Mowbray, Leicestershire.

“It benefits us in a number of ways really,” said Atkinson.

“Greenwoods is particularly focused on the clothing and apparel sector. It gives us improvements in that sector along with improved penetration in the East Midlands region and alongside that the opportunity to evaluate the corrugate recovery business [NRL] and see whether that’s something that we could extend across the Macfarlane network.”

Atkinson added that it is too early to say whether Macfarlane will roll out an NRL-style waste service across the group but that Greenwood had persuaded him and his team that it was a good way to add value to customers.

After a busy year of M&A for Macfarlane in 2016, with deals for Colton Packaging Teeside, Glasgow-based Edward McNeil and Leicester-based Nelsons for Cartons all completing, Atkinson said it is unlikely there will be any more announcements in 2017.

“Because the Q4 period is operationally intense for us, we tend not to do acquisitions or complete acquisitions in that period, so there is unlikely to be anything more in 2017,” he said. 

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