MACFARLANE Group, the Glasgow-based packaging business, has continued its buy and build strategy with the acquisition for up to £1.25 million of a Teesside-based packaging firm.

Colton Packaging Teesside, based in Thornaby near Middlesbrough, is Macfarlane’s fourth acquisition since 2014 as it seeks to consolidate the fragmented packaging market.

The firm, with eight staff, has been established for 20 years and is the North East branch of Leicestershire-based Colton Packaging, which evolved from a rope and sack business run in the 1840s by William Colton, whose ancestors were flax dressers.

In 2015 Colton Packaging Teesside generated sales of £3m.

“Colton Packaging Teesside is a high quality business with a good team of people who will complement the Macfarlane Packaging Distribution business based in Newcastle and strengthen Macfarlane’s presence in the North East of England,” said Macfarlane chief executive Peter Atkinson.

Macfarlane will pay up to £1.25m for Colton Packaging Teesside assuming key financial objectives are achieved in the 12-month period post-acquisition. Both the initial consideration of £1.05m and the deferred consideration of £200,000 will be paid from existing borrowing facilities.

In its annual report last week, Macfarlane confirmed a 10 per cent increase in its full year dividend to 1.82p per share after reporting a 21 per cent rise in pre-tax profits to £6.8 million.

The group said previously that it had increased its bank facilities with Lloyds Banking Group from £20m to £25m – with the option to extend to £30m – to fund growth.

The rise of internet shopping is fuelling growth in the sector.