Kingspan takes 51% stake in Turkish company

Kingspan has bought 51 per cent of a Turkish building materials player in a deal valued by industry watchers at about €7 million.

It emerged yesterday that the Cavan-based building materials and technology supplier recently bought the stake in Izopoli, a Turkish manufacturer of insulated and cold storage panels.

Kingspan did not comment on the deal yesterday and would not reveal the asking price as it is not material. It is understood that the sale was under negotiation for a number of weeks.

However, depending on margins, industry sources suggested it was worth $10 million (€7.6 million).

Izopoli did welcome the news.Suat Kiroglu, its chief executive, said: "Our partnership with Kingspan will give us access to many new and exciting products."

According to Goodbody Stockbrokers analyst Joe Gill, who published details of the deal in a morning note yesterday, Izopoli had $50 million (€38.37 million) in sales last year with 60 per cent exported to Syria, Iraq, Lebanon, Saudi Arabia, Kuwait, UAE, Bulgaria, Romania and Ukraine.

He described the transaction as "modest".

"It ties in with Kingspan's strategy of expanding into high growth markets," Mr Gill said.

"We are forecasting circa €550 million insulated panels sales, representing 16 per cent growth year-on-year. The division represents 52 per cent of group operating profits."

Kingspan's operating profits last year were €145 million and hit €88 million in the first six months of this year.

It is understood that the purchase is unlikely to have any immediate impact on earnings.

The deal is seen as strategic, and is part of an overall plan to roll out the business in central and eastern Europe.

Izopoli's sales in Bulgaria and Romania will be particularly attractive to the Irish company. It is already servicing these markets from a base in Hungary, but wants to free up that capacity for further expansion.

Izopoli is currently investing in doubling its capacity. It currently has the scope to produce 9,000sq m of panelling a day.

Kingspan's share price fell 15 cent, less than 1 per cent, in Dublin yesterday. However, the overall market was down as investors reacted to a further fall in the value of the US dollar.