Cavan, Republic of Ireland - Kingspan Group plc has expanded its production of insulation panels operations in North America by paying $111 million for the US operations of sandwich-panel maker Metecno. The deal achieves the group's aim of giving it, "critical mass in the US," at a time when the pressure is on to build structures with better insulation to save energy, indicated a 22 Aug Kingspan statement.
The Irish building products and insulation group acquired Metecno Inc., a holding company for the Metecno businesses in the US, from Metecno BV, a subsidiary of the Metecno Group, which is a global manufacturer of composite sandwich panels.
Metecno Inc., operating under the ASI, API and Benchmark brands, is the second largest manufacturer of composite sandwich panels in the US market, said Kingspan. It operates from three sites in Florida, Ohio and California.
"The acquisition of Metecno represents an excellent opportunity for Kingspan to assume a market leading position in one of the largest construction markets in the world. We believe that the future opportunities should more than offset the current economic conditions in this market," said Gene Murtagh, Kingspan ceo, in the statement.
Combining Metecno with Kingspan's existing businesses in Canada, gives the group "a very powerful and influential position in the North American market," he continued, adding that Kingspan's North American panel business "now has six major facilities capable of serving the entire continent and significant available capacity in each.
Metecno operates an architectural metal-wall and roof-panel profile business, under the Morin brand, from two sites in Connecticut and California.
Kingspan's statement said the acquisition gives it "combined with existing Canadian market leadership, gives unrivalled geographical market reach in North America." The group added that this comes "at a time when demand for insulation products is expected to increase due to economic and regulatory pressures."
The payment for the purchase consists of cash paid on completion for shares of $86 million plus bank debt acquired of about $25 million. The consideration may vary depending on actual debt acquired, Kingspan commented.
In the 12 months to 30 June 2008, Metecno's consolidated revenues were $137 million with earnings (EBITDA) of $15.5 million, excluding management charges.
"While composite panels have traditionally occupied only a very small position in the North American market, we believe that a combination of environmental and energy cost pressures, together with a market leading position, can pave the way for a growing penetration of this product range in the medium term," concluded Murtagh.