Kingspan eyes €300m acquisition

CAVAN-headquartered building materials group, Kingspan is considering sizing up a €300 million-plus acquisition in Germany, in a bid to expand in the country which accounts for nearly 10% of its annual revenues.

The building insulation specialist is being linked with a move for part of German industrial giant, ThyssenKrupp.

Kingspan’s chief executive, Gene Murtagh this week told the German press that the company could acquire in the country; adding that buying a company with a turnover of around €300m would be a good way to expand Kingspan’s existing German-based operations. Mr Murtagh made his comments in an interview with German newspaper, Handelsblatt — the country’s equivalent of the Financial Times. He added that Kingspan is currently under-represented in Germany and sees potential for growth there.

A spokesperson for the company said yesterday that the German expansion is currently just under consideration and didn’t name any potential takeover targets.

Overall, the speculation hasn’t received much analyst attention, but what little it has been positive.

“Kingspan has one of the strongest balance sheets in the sector. Furthermore, following a successful US private placement of $200m (€153m) last year, the company is not utilising its €330m revolving credit facility, so the company has plenty of firepower to do such a deal. Overall, we believe a deal of this size would be viewed positively by investors,” said Robert Eason of Goodbody Stockbrokers, yesterday.

Mr Eason suggested the insulated panel business of diversified industry giant, ThyssenKrupp as “an obvious target, that fits the bill”.

“Such a deal would bring significant synergies and substantially increase Kingspan’s presence on mainland Europe,” he added.

Currently, 35% of Kingspan’s annual group sales come from its operations on mainland Europe, with Germany contributing between 7% and 8% of those sales.

Speaking at Kingspan’s annual general meeting last May, Mr Murtagh said that the group was continuing to look for acquisition opportunities, but would more likely make further significant buys in early 2012 rather than during the remainder of 2011.

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