An independent Black Country packaging materials distributor has been acquired by a Scottish group in a £7.5 million deal.
Wolverhampton-based Network Packaging has been bought by Glasgow-based listed group Macfarlane.
Macfarlane will initially pay £4.9 million with £4.3 million in cash and the remainder in shares.
The deferred consideration of up to £2.6 million will become payable in two instalments in the final quarters of 2015 and 2016 respectively, subject to certain trading targets being met.
Network Packaging was established in 1997 and is strong in the third-party logistics sector and internet retail.
The directors will remain with the business post-completion and have agreed service contracts covering the earnout period.
Network Packaging made an operating profit of £800,000 on turnover of £7.8 million in 2013.
The deal was funded via a share placing at Macfarlane which raised £3 million before expenses.
Chief executive Peter Atkinson said: "The board is very pleased with the high level of support being shown for its strategy by both new and existing institutional shareholders.
"Network Packaging is a successful company and today's acquisition demonstrates our continuing commitment to the strategy of developing our UK Packaging Distribution business.
"We are delighted that the Network Packaging management team will remain with the business.
"They will add to our management capability and their experience in the third-party logistics sector and internet retail will complement the existing Macfarlane strengths in these market sectors."
The corporate finance team at law firm Browne Jacobson represented Network Packaging, led by Roger Birchall and assisted by Tina Robinson.
Mr Birchall said: "This is a good deal for all parties. The acquisition is an important strategic step for Macfarlane Group as it seeks to strengthen its footprint in the Midlands.
"We are delighted to have assisted the shareholders of Network Packaging in realising 17 years' hard work and dedication. In particular, we are pleased their invaluable management experience and expertise will continue to be utilised within the business post completion."
Financial services firm BDO in Birmingham also advised Network Packaging, led by mergers & acquisitions partner Roger Buckley.
