Monday 22 January 2018

Kingspan gets competition approval for €114m purchase

Kingspan boss Gene Murtagh. Photo: Gerry Mooney
Kingspan boss Gene Murtagh. Photo: Gerry Mooney

Paul O'Donoghue

Irish building materials and energy giant Kingspan has cleared the final hurdle in its bid to buy part of a Canadian rival for €109 million.

The Cavan-based firm announced that it has reached agreement with the Canadian Competition Bureau to buy the building products division of Canadian company Vicwest for C$154.5 million (€114m).

The consent agreement requires Kingspan to dispose of Vicwest's insulated metal panel facility at Hamilton, Ontario, following completion of the acquisition.

As the acquisition has already been approved by Vicwest's shareholders and by the Ontario Superior Court of Justice, Kingspan said the transaction is now expected to complete "imminently".

A spokesman for Kingspan said that the firm expected that it would be fully completed before the end of the month.

When asked how long it would take to integrate the division into its normal operations, the spokesman said: "Kingspan have a strong track record of bringing acquisitions into the business and a clear plan in place which will kick in when formal closing occurs."

Vicwest's building products division comprises three insulated panel manufacturing plants in addition to a number of profiling facilities across Canada and the US.

It had revenues of around C$254m for the 12-month period to the end of December 2013.

An analyst at Davy Stockbrokers viewed the deal as a positive one for Kingspan, saying: "We believe that these deals add another dynamic to what is already an exciting story.

"We will now formally incorporate Vicwest into our Kingspan forecasts and expect that it will add €6.5m to EBITA over the remainder of this year."

Once the division is fully integrated into Kingspan's normal operations, it is expected to contribute about €13m a year to group earnings before deductions.

Kingspan, headed up by Gene Murtagh, recently said that it would pull back from the acquisition trail this year as it looks to complete both the Vicwest deal and a second acquisition.

The second buy was announced at the start of the year when Kingspan said that it would buy Belgian manufacturer and supplier of insulated panels Joris Ide for €315m.

The group plans to spend about €60m over the remainder of the year on regular capital projects, including the construction of a manufacturing plant in Australia.

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