Kingspan has agreed an €85m cash deal to buy Romanian construction materials supplierTeraPlast's insulated panels division with operations in eastern Europe and the Balkans.
The sale was announced by Bucharest stock exchange- listed TeraPlast, whose main business is the manufacture of pvc products and joinery for construction.
The Romanian company's shares surged 18pc yesterday after it announced late on Friday it had agreed the sale of assets by its Terasteel unit. The business lines being sold are operated by Terasteel, Terasteel DOO in Serbia and Wetterbest.
The firms make and sell insulated sandwich panels, metallic roof tiles and other accessories.
The deal is subject to competition approval and a TeraPlast shareholder vote at an extraordinary general meeting.
The total consideration will be paid in cash and will be determined based on the headline price of 410 million Romanian leu (€85m), which may be adjusted downwards depending on factors including working capital and cash in the units sold.
In March, Kingspan CEO Gene Murtagh took aggressive action to cut costs and warned that the coronavirus crisis would be a "monumental test" for the Irish insulation giant.
The company slashed pay for senior managers by 50pc for April and May, and all other staff saw their pay packets slashed by 40pc.
A final dividend in respect of 2019, which would have amounted to about €60m, was also cancelled.
However, in May, Davy Stockbrokers analyst Flor O'Donoghue said Kingspan's balance sheet left it well placed if the wider pandemic crisis threw up investment opportunities.
Cavan-headquartered Kingspan employs more than 15,000 people at 159 locations globally.
"The business remains in fundamentally good health as is evident in its financial position. With crisis comes opportunity and, in this regard, Kingspan is well placed," said Mr O'Donoghue after a trading update in which it said global sales had decreased by almost 35pc in April compared to the same period last year as construction sites temporarily shut.
After announcing the April numbers, Mr Murtagh said that any deals the company was looking at in the area of mergers and acquisitions would be "bolt-on to medium-size and very absorbable".
The primary focus of deal- making would be consolidating in the panels and insulated boards markets, he added.
Kingspan is due to publish a half-year financial update on August 21 which will include the impact of hit to the business from the worst months of the pandemic lockdown, when the building sites across Europe and North America that are its biggest customers were shut.