Mpac Group plc, a high speed packaging and automation solutions company, has acquired the entire issued share capital of Switchback Group Inc., a supplier of packaging machinery and automation solutions to the food, beverage and healthcare markets. The board expects the acquisition to be immediately earnings enhancing.
The initial consideration for Switchback is $13 million, payable in cash. Further earn-out consideration of up to $2 million may become payable depending on performance.
The initial consideration for the acquisition has been financed from the Group's existing cash resources. Following the acquisition, the Group will maintain a strong balance sheet with a net cash position and an undrawn £10.0 million revolving credit facility.
The acquisition represents a compelling fit with Mpac's strategic intent of being a market leader in the provision of full-line packaging solutions for the pharmaceutical, healthcare and food and beverage sectors. The range of products offered by Switchback gives further breadth and depth to Mpac's cartoning and end of line solutions. Switchback will provide a platform to further build its business in the USA giving access to a wider customer base and the opportunity to provide existing customers with a wider range of productivity solutions as the industry trends towards lower volumes and higher variety.
Mpac will continue to support Switchback's strategic growth plans and staff, providing access to the group resources, global sales and service network to leverage growth opportunities in Mpac's existing core markets of healthcare and food.
The unaudited financial statements of Switchback for the year to 31 December 2019 showed revenue of $14.2 million and profit before tax of $2.1 million. Unaudited net assets at the same date were $4.4 million including net cash of $4.9 million.