Kingspan linked with acquisitions as financial firepower passes €2bn mark

Kingspan CEO Gene Murtagh

Cavan-based building insulation specialist Kingspan is expected to make further acquisitions on the back of boosting its financial firepower to over €2bn by way of raising €750m through the sale of ‘green’ bonds.

The company’s shares jumped by well over 4% on the announcement of it completing what it said was the largest corporate green private placing ever.

Sales of co-called green bonds require the money raised to be used for environmentally-friendly investments, which is unlikely to cause much hardship for Kingspan which has consistently boosted its environmental credentials in the past few years.

Kingspan’s chief financial officer Geoff Doherty said the placement extends the group’s debt maturity profile and provides long-term capital to further develop the overall business.

While largely seen as an opportunity to scale-up its resources at a time of low-cost credit availability, analysts expect the money raise to lead to more acquisitions.

“Kingspan has already undertaken three bolt-on acquisitions of a decent size in the year to date and further activity is likely,” said Davy’s Flor O’Donoghue.

Davy also sees continued internal investment.

"As has been well documented, the group invests significantly in product development and capacity expansion and has also been an active consolidator in existing product areas while simultaneously investing in newer areas such as its Light & Air division," Mr O'Donoghue said.

Speaking after Kingspan released financial results for the first half of this year, last month, CEO Gene Murtagh said that while building an international presence in newer product areas will require acquisitions, there has not been a “satisfactory” number of opportunities at the right price.

He said Kingspan will remain disciplined in terms of pricing when looking at acquisitions.