Macfarlane Group (Clansman) plc has furthered the consolidation in Britain's industrial polyethylene film business by acquiring Amalgamated Plastics Ltd.
``We will significantly increase our share of the industrial film market in the U.K., in addition to increasing our purchasing power,'' said Lord Macfarlane of Bearsden, chairman of Glasgow, Scotland-based Macfarlane.
He added that Amalgamated brings ``unique bubble and cast film products'' to his firm's portfolio and boosts Macfarlane's national distribution network.
The firm plans to establish an industrial plastic film division this year, and plans to announce more acquisitions shortly.
Macfarlane agreed to pay an initial £5 million ($8.1 million) for Amalgamated of Potters Bar, England. It produces industrial film products for pallet and stretch wrap as well as for agricultural use.
In addition, the buyer offered a performance-related payment of £2.5 million ($4.05 million) in 1998, which will depend on the disposal of a leasehold property.
The initial payment will include £1.44 million in cash ($2.33 million), £1.32 million ($2.14 million) in loan notes and £1.25 million ($2.03 million) of Macfarlane shares, according to Macfarlane.
Amalgamated, which employs 135, reported profit of almost £500,000 ($810,000) for the fiscal year ended Oct. 31, before directors' payments and exceptional charges. The firm reported sales for the same period of £21.2 million ($34.3 million).
Macfarlane Group also announced it is shutting down and relocating its Aberdeen, Scotland, caps and closures plant, ACW Ltd., as part of a reorganization of it plastics molding division.
The Aberdeen injection molding operation will be combined with Daniel Montgomery & Son Ltd., Macfarlane's metal and plastic whisky bottle closure and fitment business, which is in Kirkintilloch, Scotland
The company expects to keep all 55 of the ACW work force and to pay the cost of relocation from the proceeds of its sale of the Aberdeen plant site.
The divisional reorganization, which should be completed by late this year, was prompted by continuing poor results recorded by ACW. It produces a range of caps and closures for pharamaceutical, detergent and other products.
Macfarlane has a third plastics division in Ireland, Wicklow Group, which injection molds caps, closures and other products.
The Glasgow-based parent's 1996 results also have been hit, chiefly through Daniel Montgomery, whose profitability suffered. This followed short-term destocking in the Scotch whisky industry, the company said.
Macfarlane reported company sales down by 1 percent to £157 million ($254.3 million), while pre-tax profit fell 3.8 percent to £20.4 million ($33 million).