Macfarlane Group PLC announces acquisition of Greenwoods in conjunction with a proposed share placing
In line with its strategy to further develop its Packaging Distribution business in the UK protective packaging market, the Board of Macfarlane Group PLC (“Macfarlane”) announces the conditional acquisition of the trade and selected assets of Greenwood Stock Boxes Ltd. and 100% of the share capital of its sister company, Nottingham Recycling Ltd., (“Greenwoods”), in conjunction with a proposed share placing to raise approximately £8 million before expenses.
The maximum consideration for the acquisition is £16.75m, to be paid in a combination of Macfarlane shares and cash.
Greenwoods is a high quality, well established packaging distributor located in Nottingham and Melton Mowbray. The business primarily distributes corrugate packaging with a particular focus on the clothing retail sector. It also operates a small corrugate manufacturing site, and a collection and baling service for waste corrugate.
The Macfarlane Board is confident that Greenwoods will provide access to new customers, increase Macfarlane’s exposure to the clothing retail sector and offer synergistic cost savings through the supply chain.
Macfarlane has conditionally agreed to acquire Greenwoods for a consideration of up to £16.75 million in a combination of 9,090,909 new ordinary Macfarlane shares of 25 pence each (“Vendor Shares”) and £7.5 million in cash (total value: £13.5 million) and a cash earn out of £3.25m after a period of 12 months, subject to certain trading targets being met. The Macfarlane Board anticipates the acquisition will be earnings enhancing in the first full year of ownership.
Macfarlane’s Chief Executive, Peter Atkinson, commented:
“This acquisition is another major step forward in our growth strategy. Greenwoods is a long established, high quality business which has successfully developed into attractive markets with good growth potential. We see significant benefits in Greenwoods becoming part of Macfarlane Group and look forward to their continued success.”
- Macfarlane intends to raise £8 million before expenses through the Share Placing arranged by Arden Partners plc of up to 12,121,212 new Ordinary Shares at a price not less than 66 pence per share (such ultimate price being the Placing Price) with new and existing shareholders.
- The funds raised from the Share Placing will be used to part fund the acquisition.
- At the lowest price of 66 pence, this represents a discount of approximately 1.1 per cent. to the closing price on 15 September 2017, being the last business day before this announcement.
- Admission of the Placing Shares and Vendor Shares is expected to take place on 21 September 2017.
Full details of the acquisition and the Share Placing are set out in the attached document.