Scottish packaging specialist Macfarlane Group has acquired two Nottingham firms in a cash and shares deal worth up to £16.75m.
The Glasgow-based firm is buying Greenwood Stock Boxes and its sister company, Nottingham Recycling, as part of growth plans.
The deal is Macfarlane's biggest acquisition to date.
Greenwood distributes corrugate packaging, mainly in the clothing retail sector.
The deal includes an initial consideration of £13.5m in shares and cash. A further sum of up to £3.25m will be paid if certain trading targets are met in the 12 months after the acquisition.
Macfarlane said it planned to raise £8m through a share placing to part-fund the transaction.
The group expects the acquisition to be earnings-enhancing in the first full year of ownership.
Chief executive Peter Atkinson said: "This acquisition is another major step forward in our growth strategy.
"Greenwoods is a long-established, high-quality business which has successfully developed into attractive markets with good growth potential."