REG - Macfarlane Group PLC - Aquisition of Polyformes

MacfarlaneAnnouncement

08/07/2024 07:00

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RNS Number : 4020V  Macfarlane Group PLC  08 July 2024

 

8 July 2024

Macfarlane Group PLC

("Macfarlane" or the "Group")

Earnings accretive acquisition of protective packaging manufacturer,
Polyformes

Macfarlane Group PLC announces the acquisition of Polyformes Limited
("Polyformes") for up to a maximum cash consideration of £11.5 million,
including an earn-out of up to £4.8 million over two years.  This
earnings-enhancing acquisition demonstrates further progress in our strategy
to build the Group's protective packaging business through a combination of
organic and acquisitive growth.

Strategic highlights

·      Founded in 1977, Polyformes designs and converts foam primarily
for specialist protective packaging applications supplying to customers in the
aerospace, medical, defence and industrial sectors, throughout the UK.

·      Polyformes is based in Leighton Buzzard and has an experienced
team of 60 employees, including its three directors who will all remain with
the Group following the acquisition.

·      There are significant opportunities for both Polyformes and
Macfarlane to benefit from access to their respective industry expertise,
ranges of bespoke protective packaging products and common supplier base.

·    For the year ended 31 December 2023, Polyformes generated sales of
£9.3 million, with EBITDA of £1.5 million and pre-tax profits of £1.4
million.

·      This earnings accretive acquisition further demonstrates
Macfarlane's comprehensive 'buy and build' strategy in delivering further
stakeholder value.

Transaction details

·        Macfarlane's wholly owned subsidiary, Macfarlane Group UK
Limited, has acquired 100% of Polyformes for a maximum cash consideration of
£11.5 million (including an earn-out of up to £4.8 million based on agreed
profit growth targets over two years).

·        A further adjustment is due for net assets in excess of £1.6
million with the expected net assets on completion being £1.8 million,
including £0.7 million of net cash.

·        The consideration is being financed entirely from
Macfarlane's existing bank facility. The Group continues to operate well
within its bank facilities of £35 million and related covenants, which are
committed until December 2025.

Peter Atkinson, Chief Executive of Macfarlane, said:

"Polyformes is a profitable, growing, well invested company with an
experienced management team that is fully committed to the business. We look
forward to working with the team at Polyformes to support its continued growth
and develop opportunities for us to work together to provide our customers
with a broader portfolio of protective packaging solutions."

 

 

 Further enquiries:  Macfarlane Group                                                      Tel: 0141 333 9666
                     Peter Atkinson             Chief Executive
                     Ivor Gray                      Finance Director

                     Spreng Thomson
                     Callum Spreng                                                         Mob: 07803 970103

 

Legal Entity Identifier (LEI):  213800LVRYDERSJAAZ73

 

Notes to Editors:

·          Macfarlane Group PLC has been listed on the Premium
segment of the Main Market of the London Stock Exchange (LSE: MACF) since 1973
with over 70 years' experience in the UK packaging industry.

·          Through its two divisions, Macfarlane Group services a
broad range of business customers, supplying them with high quality protective
packaging products which help customers reduce supply chain costs, improve
operational efficiencies and sustainability and enhance their brand
presentation. The divisions are:

o   Packaging Distribution - Macfarlane Packaging Distribution is the
leading UK distributor of a comprehensive range of protective packaging
products; and

o   Manufacturing Operations - Macfarlane Design and Manufacture is a UK
market leader in the design and production of protective packaging for high
value and fragile products.

·          Headquartered in Glasgow, Scotland, Macfarlane Group
employs over 1,000 people at 40 sites, principally in the UK, as well as in
Ireland, Germany and the Netherlands.

·          Macfarlane Group supplies more than 20,000 customers,
principally in the UK and Europe.

·          In partnership with 1,700 suppliers, Macfarlane Group
distributes and manufactures 600,000+ lines supplying to a wide range of
sectors, including: retail e-commerce; consumer goods; food; logistics; mail
order; electronics; defence; medical; automotive; and aerospace.

 

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