Kingspan makes €700m bid for units of Belgian group Recticel

Insulation specialist Kingspan is offering to pay €700 million for parts of Belgian group Recticel, in what would be the Irish company's biggest acquisition.

Kingspan confirmed on Tuesday that it has bid €700 million for Recticel’s insulation and flexible foam manufacturing businesses. The figure is thought to be the highest that Cavan-based Kingspan has offered for any rival.

However, the Irish company will sell Recticel’s foam business immediately if it succeeds in buying both of the Belgian group’s units. Kingspan said that it has already agreed an exclusive deal with a unnamed third party, which would buy the division.

Recticel’s insulation operation is the smaller of the two, with sales of €270 million last year against the €626 million earned by the foam operation. However, the insulation business is more profitable, generating a surplus of €44.7 million last year compared with its fellow division’s €41.5 million.

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Kingspan cautioned that the bid was subject to the Recticel board’s agreement, completing due diligence and competition regulators’ approval.

The Belgian player confirmed the offer on Tuesday. “Recticel’s board will analyse the proposal in line with its fiduciary duty and update the market,” the company said.

Its statement also noted that Kingspan had not provided it with any details of the deal to sell on the foam business, including the buyer’s identity.

Recticel has two smaller divisions which make mattress fillings and material for car seats. Kingspan is not seeking to buy them.

Recently Kingspan, led by chief executive Gene Murtagh, noted that finance was robust with "€660 million of committed undrawn facilities and cash".

Kingspan previously had a joint venture with Recticel but bought out the Belgian group’s share in 2015.