Kingspan acquires UK business for £37.5m

Building materials group Kingspan has acquired a UK manufacturer and distributor of construction products for £37.5 million (€42 million).

The Cavan-headquartered supplier of insulation has acquired Building Solutions (National) Ltd on a cash and debt-free basis after its owner, SIG Plc, initiated a competitive process to offload the business.

Building Solutions controls a number of brands including cladding and steel company Steadmans and United Roofing Products. Last year, the entire business reported revenue of £60 million, operating profit of £3.3 million and operating cash flow of £5 million. The sale price represents a valuation of about 11.4 times operating profit.

SIG, the British-based insulation supplier, said the sale follows a 2017 strategic review which concluded that the manufacturing focus and product offering of Building Solutions was “very different to that of the core SIG businesses.”

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"This disposal, on attractive terms, is in line with SIG's medium-term strategy and completes the exit of peripheral, non-core businesses identified in our 2017 strategic review," the company's chief executive, Meinie Oldersma, said.

Kingspan had, earlier this year, indicated its intention to acquire more businesses after a slow start to the year which saw it fail in its €700 million bid for two divisions of Belgian company Recticel.

Completion of the deal is conditional on clearance by the UK's Competition and Markets Authority.