Kingspan acquires UK business for £37.5m
SIG Plc initiated competitive process to offload business after strategic review
Kingspan chief executive Gene Murtagh. Photograph: Cyril Byrne
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.”
“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.