MACFARLANE Group has made its second acquisition of the year after agreeing to pay up to £7.5 million for Network Packaging.

Peter Atkinson, Macfarlane chief executive, said the move will improve the company's coverage in the Midlands as well as bringing in some new customers.

However, Mr Atkinson confirmed the main reason for moving on Wolverhampton-based Network was the overall quality of the company and its alignment with Macfarlane.

He said: "They have established a really strong presence in the internet retail and third-party logistics sector. It is very complementary to our strategy in those sectors."

All 25 staff at Network will transfer over as part of the deal.

Macfarlane is paying £4.3m in cash along with £600,000 in shares upfront with further payments being triggered in the final quarters of 2015 and 2016 if targets are met.

Network made £800,000 of operating profit on £7.8m turnover in 2013 and is expected to be earnings enhancing for its new owners in the current year.

Mr Atkinson said: "That is the benefit of buying a quality business. There are no significant reorganisation costs involved. We can move it forward positively from day one."

Macfarlane also anno-unced a £3m share placing, which will require to be approved at a general meeting at the end of this month.

Institutional investors have snapped up the eight million shares on offer already.

Mr Atkinson said: "The placing just increases our firepower alongside the new banking facility [agreed earlier this year]."

With Macfarlane about to enter its busiest trading period of the year, Mr Atkinson said further deals will take a "time-out" until 2015.

However he signalled more acquisitions are on the cards and said: "We have got a number of other things we are working on. It is genuinely a programme where we are in various stages of discussions with people.

"I would be disappointed if we don't have another acquisition to announce in the first part of 2015."

A note from Macfarlane's house broker Arden Partners said the deal gives Macfarlane the chance to try to move Network customers over to its national network. Arden expects the deal to add around £250,000 to Macfarlane's operating profits in 2014.

Macfarlane bought PSD Industrial Holdings, the parent of Lane Packaging, in May this year in a deal worth up to £1.1m.