Kingspan buys US group for €75m

KINGSPAN, the building products group that is due to announce a dip in earnings, has bought a US panels group for $111 million (€75m).

The acquired business, Metecno Inc, is a global manufacturer of composite sandwich panels and a subsidiary of the Metecno Group.

“While composite panels have traditionally occupied only a very small position in the North American market, we believe that a combination of environmental and energy cost pressures, together with a market leading position, can pave the way for a growing penetration of this product range in the medium term,” said Kingspan chief executive, Eugene Murtagh.

Operating under the ASI, API and Benchmark brands, Metecno Inc is the second largest manufacturer of composite sandwich panels in the US. It operates from three sites in Florida, Ohio and California and incorporates an architectural metal wall and roof panel business.

The acquisition, Mr Murtagh said, “gives Kingspan critical mass in the US, and when combined with existing Canadian market leadership, gives unrivalled geographical market reach in North America, at a time when demand for insulation products is expected to increase due to economic and regulatory pressures”.

The price of $111m involves a cash payment of $86m, plus bank debt acquired of $25m. The consideration may vary depending on debt acquired.

In the 12 months to 30 June 2008, Metecno had consolidated sales of $137m and earnings of $15.5m.

The acquisition is expected to mildly enhance earnings from 2008 onwards the group said, and will be funded in full from existing resources.