Macfarlane Group PLC, a UK-based packaging company with a label manufacturing division, has announced that it has concluded an agreement to acquire One Packaging Limited for a consideration of up to £2.75 million. The initial consideration of £2.0 million will be paid in cash from Macfarlane’s existing borrowing facilities. The deferred consideration of up to £0.75 million will become payable in the third quarter of 2016, subject to certain trading targets being met in the twelve month period following acquisition. Half the deferred consideration will be paid in cash and half will be paid in ordinary shares in Macfarlane Group PLC. One was established in 2003 and is a packaging distributor based in Bingham near Nottingham, which will strengthen Macfarlane’s existing Packaging Distribution activities in the East Midlands, UK.

One Packaging made an operating profit of £0.4 million before non-recurring costs on turnover of £4.9 million in the financial year to July 31, 2014. Gross and net assets in the audited accounts at that date totalled £2.0 million and £0.1 million respectively. The acquisition is based on net assets at completion totalling £0.2 million. The deferred consideration reflects One’s business plan to improve turnover and operating profits by over 25% by the end of the earn-out period.

Macfarlane’s Chief Executive Peter Atkinson comments: “One is a good quality, successful packaging distributor. This acquisition demonstrates our continuing commitment to the strategy of developing our leadership position in the UK market for the distribution of protective packaging. We are delighted that Greg Almond will remain with the business. His considerable knowledge and expertise will complement the existing Macfarlane business in the East Midlands area.”