Macfarlane Group said yesterday it had reached an agreement to acquire Online Packaging for a cash consideration of about £5.1m.

Macfarlane will pay £4.3m immediately, with the rest to be handed over in the first quarter of 2009, provided trading targets are met.

Glasgow-based Macfarlane said the Online deal will help it develop its packaging distribution division. Online, which specialises in industrial packing materials and is based in Gloucester, was set up in 1994 and has additional sites in Wakefield, West Yorkshire, and Hinckley, Leicestershire. It made an operating profit of £600,000 on turnover of £7.5m in the year to August 31, 2007.

Macfarlane's chief executive, Peter Atkinson, said: "Online is a successful company and this acquisition further demonstrates our commitment to the strategy of developing our packaging distribution business."

Atkinson also said Online's management will remain with the business.

The deal was announced only a few months after Macfarlane off-loaded non-core divisions of its manufacturing business, with an agreement to sell two of its North American operations.

US-based Macfarlane Western Foam Packaging Products, and Macfarlane de Mexico SA de CV, were snapped up by US packaging company, Specialized Packaging Group, for a total cash consideration of £3.8m.

At the time, John Love, Macfarlane's finance director, said the sale of the businesses, which designed and manufactured foam packaging components, was in line with its strategy of concentrating on and developing its core packaging distribution businesses.