| 12.1°C Dublin

Kingspan to buy Belgian insulated-panel company Joris Ide

Close

Kingspan's CEO Gene Murtagh photographed at the Radisson Hotel at Dublin Airport.

Kingspan's CEO Gene Murtagh photographed at the Radisson Hotel at Dublin Airport.

Kingspan's CEO Gene Murtagh photographed at the Radisson Hotel at Dublin Airport.

Building materials company Kingspan has confirmed it is buying Belgian insulated-panel maker Joris Ide group.

The acquisition price is €315m including debt, the company announced today.

Gene Murtagh, Kingspan Chief Executive Officer, said: "The acquisition of Joris Ide Group represents a quantum leap forward in the execution of our strategy to fully globalise Kingspan. It takes us into a distinctly different tier in the market than typically occupied by the Kingspan branded products, and with its operations in Belgium, France, Germany, Romania and Russia significantly extends the reach of our Group."

Analysts said the deal would be positive for Kingspan.

"While recognising that the detail of any transaction would be important, our initial reaction is that the deal makes sense from a strategic perspective," Davy's Flor O'Donoghue said.

"One of Kingspan's targets is to consolidate the European insulation market and Joris Ide would represent a major opportunity.

Kingspan also announces that it has negotiated €127.5m private placement loan notes with weighted average maturities of eight years. The weighted average coupon on the new notes is 1.92pc. The proceeds will be primarily used to repay private placement loan notes which are due to mature in March 2015.  Kingspan has also negotiated additional bilateral facilities of €190m. These facilities, together with cash and drawings from the previously undrawn Revolving Credit Facility, will be used to fund the Joris Ide and previously announced Vicwest acquisitions.

In November it completed the $82m (€73m) purchase of Pactiv's US building insulation business, and announced it had agreed to buy the building insulation business of Canadian company Vicwest for 154.5 Canadian dollars (€110m).

Kingspan has the firepower to complete further, smaller deals if the Joris Ide transaction goes ahead, but is likely to focus on integrating Joris Ide, Merrion Capital head of research David Holohan told the Irish Independent.

Investor reaction to the deal was muted. Shares in Kingspan closed down almost 1pc in Dublin.

Kingspan did sales of €1.39bn in the nine months to September 30, up 5pc on the prior year.

Irish Independent