Tue, 07 Mar 2023 | BUSINESS SALE
Specialist protective packaging manufacturing firm AE Sutton has been acquired by Macfarlane Group in a deal worth up to £9 million. The price, which includes an earn-out of up to £2.5 million contingent upon agreed profit growth targets for the next two years, represents an 8.1 x multiple of AE Sutton’s £1.1 million EBITDA for the year ending March 31 2022.
During that year, the company reported pre-tax profits of £0.9 million on revenue of £7.4 million. Its fixed assets were valued at £2.5 million and current assets at £2.9 million, with the company holding net assets of close to £4.1 million.
AE Sutton was founded in 1962 and trades as Suttons Performance Packaging. The Cambridgeshire-based company serves customers across the electronics, industrial and medical sectors from its Chatteris manufacturing facility. Following the acquisition, AE Sutton’s two directors will remain with the business.
Macfarlane, which is based in Glasgow, is a designer, manufacturer and supplier of protective packaging. The company’s growth strategy is focused around its protective packaging business and incorporates both buy and build acquisitions and organic growth opportunities. The company has also made strategic divestments as it focuses on the growth of its protective packaging operations.
Macfarlane Chief Executive Peter Atkinson commented: “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 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.”
In its recent accounts for 2022, Macfarlane reported a 10 per cent increase in revenue from continuing operations, which grew to £290.4 million, despite a drop in demand for e-commerce, while pre-tax profits grew 7 per cent to £19.9 million.
Macfarlane highlighted the contributions made by its recent acquisitions of Carters Packaging in 2021 and Packmann in 2022 to its improved results.
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