Warming-up for large-scale buy-outs

Kingspan is intent on making further large-scale acquisitions in Europe and north America this year, with the company capable of absorbing takeover costs of over €300m.

Warming-up for large-scale buy-outs

Speaking on the back of a better-than-expected set of full-year results, for 2013, yesterday, the specialist building materials group’s chief executive, Gene Murtagh, said “a very healthy pipeline of opportunities” exists for the company, and management was “disappointed” not to have been able to conduct some acquisition business since the beginning of last year.

“We’re absolutely looking for acquisitions but they have to be absolutely right,” Mr Murtagh said, adding that, if anything, Kingspan is even more capable of absorbing the costs of a big money deal than it was even at the halfway point of last year.

Kingspan is looking to further expand its insulated panels and insulation boards divisions in continental Europe and North America. Despite realistic valuations of prospective buyout targets being a major stumbling block to the group making more deals, Mr Murtagh seems confident of management’s ability to land the right targets at the right prices during 2014.

The group’s last major acquisitions were made at the tail-end of 2012, via the €65m purchase of ThyssenKrupp Construction — the former insulation products division of German steel giant, ThyssenKrupp — and the €31.4m buyout of Dubai-based roofing specialist, Rigidal. Both of those deals contributed healthily to Kingspan’s overall 2013 performance.

Kingspan’s newly-published 2013 figures show that in the area of insulated panels — which contributes over 50% of group annual revenue — sales increased by 7% in North America, mainly thanks to improving awareness of, and demand for, energy-efficient building fabrics, and by 46% in mainland Europe.

Kingspan’s debt reduction programme continued last year, with net debt amounting to €107.6m as of the end of December, down from €165.5m as of the end of the previous year.

In his outlook for the current year, Mr Murtagh said that management remains focused on extending and consolidating its global footprint and improving returns on capital.

“Kingspan is well-placed for the year ahead,” he added.

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