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Kingspan snaps up building materials group for £37.5m

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Gene Murtagh, CEO of Kingspan

Gene Murtagh, CEO of Kingspan

Gene Murtagh, CEO of Kingspan

Insulation giant Kingspan has acquired Building Solutions Limited, a UK-based manufacturer and distributor of building materials, for £37.5m (€42m).

According to analysts at Davy Stockbrokers, the acquisition is "of the bolt-on type", and will add around just 1pc to Kingspan's revenues and operating profits over a full year.

Building Solutions, which last year reported revenue of £60m and profit of £3.3m, operates through its Steadmans, United Roofing Products, Trimform Products and Advanced Cladding & Insulation brands. The company has assets of £28.8m.

The Cavan-headquartered Kingspan is buying the business on a cash-free, debt-free basis.

Meinie Oldersma, CEO of SIG - the company that owns Building Solutions - said the sale was "in line with SIG's medium-term strategy".

Shares in SIG plummeted yesterday, after the business warned that a deepening downturn in the UK and German construction markets would hit profits. The Sheffield-based company shed more than a fifth of its share value in early trading, after it told investors that annual profits in its core business would be "significantly lower" than previously predicted.

Kingspan spent approximately €470m on eight acquisitions in 2018, while earlier this year, it was unsuccessful in its attempt to acquire some or all of Belgian rival Recticel.

However, in August, the group's CEO, Gene Murtagh, said the company remained open to acquisitions - including of Recticel - and would be "comfortable" buying in the €600m range.

Revenue at Kingspan was up by 12pc to €2.2bn in the six months to June 30.

Trading profit at the group, which employs 14,000 people worldwide, jumped 18pc year-on-year to €230.4m, according to interim results. Shares in Kingspan were down less than 1pc in afternoon trading yesterday.

Additional reporting PA

Irish Independent