Kingspan spends €35m on US acquisition

Gene Murtagh-led insulation group is expected to deliver €3.1bn of revenues this year

Kingspan unveiled an interim statement last week which said sales for the first nine months of the year had risen 13% on the same period in 2015

Kingspan unveiled an interim statement last week which said sales for the first nine months of the year had risen 13% on the same period in 2015

 

Insulation group Kingspan is understood to have spent $37 million (€35m) last month on the acquisition of a US maker of skylights and smoke vents.

The purchase of California-based Bristolite was mentioned briefly in a trading update by Kingspan last week. However, the statement gave no details of the transaction, which is believed to have been funded out of the Cavan-based group’s existing cash.

The US business is being integrated into Kingspan’s new “light and air” division which was created this year following the group’s €126 million purchase of Essman, a German company which makes skylights and ventilation systems.

The annualised sales of this unit will be some €190 million as Kingspan exits 2016, equivalent to 6 per cent of the €3.1 billion consensus forecast among analysts for the group’s full-year revenues.

The purchase of Bristolite, which focuses on industrial and commercial markets, took place in October. A Kinsgpan spokesman declined to comment.

Growth plans

Rick Beets

Shares in Kingspan, led by chief executive Gene Murtagh, are down almost 7 per cent, at €23.25, from where they were trading immediately before UK voters decided in June to exit the EU. This gives the company a market value of €4.1 billion.

However, the company unveiled a robust interim management statement last week which outlined that sales for the first nine months of the year had risen 13 per cent to €2.27 billion on the same period in 2015.

Trading profit

Meanwhile, Kingspan, which had €466 million of net debt at the end of September, also sold €250 million of debt in the US last week in a private placement. The new notes, which carry an average term of nine years, were priced to pay an annual coupon of 1.48 per cent.

Some of the proceeds will be used to repay debt due in March that has an annual interest rate of 4.15 per cent.

The average interest rate on Kingspan’s debt, which fell to 3.06 per cent at the end of last year from 5.2 per cent 12 months previously, is set to fall further as a result of the latest transaction, according to Mr O’Donoghue.