Kingscourt, Ireland -- Insulation and insulated panels producer Kingspan Group plc has expanded by buying two panels producers: ThyssenKrupp Construction Group and Rigidal Industries llc.
Kingspan is buying ThyssenKrupp Steel Europe AG's panels unit, which it says is "the leading European insulated panels business."
ThyssenKrupp Construction Group has market-leading brands including Hoesch, Isocab and EMS, has seven well invested manufacturing plants in Germany, France, Belgium, Austria and Hungary. The business had sales in the year to 31 March 2012 of Euro 315 million ($387 million) and recorded an operating loss of Euro 5.7 million in the period. It has gross assets of circa Euro 101 million.
The purchase consideration is around Euro 65 million, of which about Euro 50 million is payable in cash on completion and the remaining Euro 15 million represents assumed past service pension liabilities.
The agreement is subject to local regulatory approval.
Separately, Kingspan said that it has agreed to acquire Rigidal Industries llc, a leading Middle Eastern manufacturer of composite panels and roofing systems based in Dubai with an extensive route to market in the Gulf region. Rigidal had sales of $39 million in the year to 30 June 2012. Kingspan is paying $38.6 million of which $30 million is payable in cash on completion.
Completion of this acquisition is also subject to local approval.
The ThyssenKrupp deal has been rumoured for several months now, with Kingspan openly acknowledging its wish to expand its insulated panels business further in Europe.
Kingspan said these acquisitions are expected, in aggregate, to add modestly to earnings in 2013 taking into account the restructuring and integration initiatives to be implemented in the ThyssenKrupp business.
"These acquisitions are an exciting development for Kingspan," commented Gene Murtagh, Kingspan ceo in a company statement.
"The ThyssenKrupp business will transform our mainland Europe insulated panels market presence in a region where market penetration is growing, rooted in the need for more energy efficient buildings," Murtagh added.
With Rigidal, Murtagh said, Kingssan gains "an excellent platform to develop our existing business and market presence in the Gulf region where demand is growing."
The Kingspan ceo concluded: "These acquisitions represent another step in furthering the group's global presence and route to market."