Macfarlane Group has acquired Leyland Packaging Company in a deal that could be worth up to £3.25m when complete after courting the business for more than a decade.
Confirmed this morning (2 September) and closed on Friday night, the deal brings the Lancashire-based protective packaging specialist into the growing Glasgow-headquartered group as the 11th buy in a five-year acquisitive streak.
All 12 staff will remain with the business, which mainly serves industrial clients. Owners Andrew and Joanne Parr will participate in a 12-month earn-out period as is standard for all Macfarlane acquisitions. The owners will take an earn-out of £1m as part of the £3.5m transaction value, which also includes an initial consideration of £2.25m.
“Leyland was one of the first businesses we profiled for potential acquisition targets about 12 years ago and, though the time was not right then, we have stayed in touch,” said Macfarlane chief executive Peter Atkinson.
“It is a classic packaging distribution business that is high quality and well run, and it is now at a stage where the owners are ready to step back and hand it over to someone that they are confident can take it on successfully.
“We are buying a good-quality business with a good-quality brand that has been built up over time and so Leyland will retain its identity going forward.”
He added: “Our priority is now getting to work with the Leyland staff and making them feel good about the acquisition as we go into the heavier Q4 seasonal period.”
Leyland Packaging adds £4.06m sales to Macfarlane, which reported a turnover that had risen to £107.5m in its half-year results at the end of August. The report indicated a fall in sales in packaging design and manufacture, though distribution continues to grow.
Macfarlane’s latest acquisition runs on a 3,400sqm site and utilises easy access to the M6, M61 and M65 to address industrial customers in the local area. Its new parent will use the operation to increase its access to the local market.
Atkinson said that the initial steps would be to ensure a “seamless transition” for Leyland’s clients, though Macfarlane would also look into which of its additional products and services could be added to Leyland’s provision.
He suggested that a further acquisition could be on the cards before the end of the year, though it may be pushed into 2020 given the high demand in Q4. Macfarlane has acquired two companies so far in 2019, with the first being Aylesbury protective packaging distributer Ecopac in May.
With 1,000 employees across 36 UK sites, Macfarlane has engaged this year in preparations for an imminent Brexit by working on strategic stockholding with its clients and its EU-based suppliers, while also doubling the capacity of its South West distribution facilities.