Kingspan Brazilian deal likely to be first of many

Kingspan is expected to use its long-awaited entry to the Brazilian market as a foundation for furthering its aim of establishing a significant presence in the Latin American region.

The Cavan-headquartered specialist building materials group has long since identified Brazil as a key growth market and, yesterday, announced the purchase of a 51% stake in the country’s leading manufacturer of insulated panels, Isoeste Constructivos Isotérmicos, for an undisclosed sum.

Kingspan made its first South American acquisition — a 51% stake in Colombian insulated panel manufacturer Panelmet — in April of this year and followed it up with the opening of a manufacturing plant in Mexico.

Last month, when reporting a strong performance for the first half of the year, the company spoke of its long-term Latin American strategy, calling it “an entirely new frontier” for the business.

“Together with our recent investments in Colombia and Mexico, this acquisition firmly places Kingspan in a market-leading position across Latin America, with a strong platform for further expansion in the region,” Kingspan chief executive Gene Murtagh said.

Kingspan shares — up almost 35% since the turn of the year — rose another 3.5% on the back of yesterday’s news, which was also welcomed by analysts.

“Our initial reaction is that the deal should be positively received and is clearly consistent with the group’s strategy and ever-broadening horizons,” Davy said.

Kingspan has spent an estimated €100m on acquisitions this year and with total available headroom of close to €700m is expected to conduct “significantly more” deals, according to Goodbody.