Belgian rival turns down Kingspan's €240m bid

A BELGIAN rival has rebuffed insulation and construction materials group Kingspan’s €240 million for part of the business.

It emerged yesterday that Belgian insulation products manufacturer Recticel turned down an offer from the Irish company which was originally made midway through last year.

Kingspan offered Recticel €240 million for its insulation business, which accounts for almost 60 per cent of the €46 million profit that the company earned in 2009.

It has since emerged that Recticel turned down the offer. A spokesman for the group told local press yesterday that the insulation division had “the most potential” of all its businesses in terms of sales and profit.

Publicly-quoted Recticel manufactures foam used in insulation, the automotive industry and bedding. It had almost €1.3 billion in sales in 2009, the last full year for which figures are available.

Kingspan specialises in insulation and energy-saving products for buildings. It has businesses in Ireland, Europe, the US, Canada and Australia.

Three months ago, it announced that it was buying a range of European insulation businesses from another Irish player, CRH, for €120 million.

The group signalled last year that it was in the market for acquisitions. Chief executive Gene Murtagh estimated that Kingspan could spend at least €250 million.

Since the domestic and international building industries went into recession three years ago, the group has focused on costs, generating cash and cutting debt.

Last August, it reported it had cut debt by €100 million in the 12 months to June 30th to €135.1 million. It is expected to complete the purchase of the businesses it has agreed to buy from CRH by the end of March.

A note from Bloxham Stockbrokers said Kingspan was likely to focus on integrating these businesses into the group this year. Kingspan had profits of almost €560 million in the six months to June 30th last. The Cavan-based group is due to report full year results for 2010 in March.