Macfarlane Group has acquired Suttons Performance Packaging, a Cambridgeshire-based packaging manufacturing business.
Founded in 1962, Suttons supplies specialist protective packaging to customers in the medical, electronics and industrial sectors, throughout England.
Suttons has a team of 55 employees, including its two directors, who will both remain with the group following the deal.
Macfarlane’s has acquired 100% of Suttons for a maximum cash consideration of £9m, including an earn-out of up to £2.5m, based on agreed profit growth targets over two years.
A further adjustment is due for net assets in excess of £1m, with the expected net assets on completion being £5.7m, including £5m of net cash.
The consideration is being financed entirely from the group’s existing £30m bank facility.
For the year ended 31 March 2022, Suttons generated sales of £7.4m, earnings of £1.1m and pre-tax profits of £900,000.
Peter Atkinson, chief executive of Macfarlane, said: “Suttons is a profitable, well invested company with an experienced management team that is fully committed to the business going forward.
“The acquisition is being funded using our existing bank facility and will be earnings enhancing.
“We look forward to working with the team at Suttons to support its continued growth and develop opportunities for us to work together to provide all our customers with a broader portfolio of protective packaging solutions.”
FRP Corporate Finance advised Suttons on the transaction.
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