LONDON (Alliance News) - Kingspan Group PLC said Monday that it has entered into an agreement with Pactiv LLC to acquire its US building insulation business.
Low-energy building solutions said that Pactiv's building insulation division produces a range of extruded polystyrene insulation products under the GreenGuard brand which it supplies throughout the USA from its manufacturing base in Virginia.
Kingspan said the enterprise value comes in at USD82 million, of which USD72 million is payable in cash on completion plus USD10 million of working capital. Gross assets being acquired amount to USD30 million. The agreement is subject to local approval of licence and permit transfers.
The acquisition will be funded from Kingspan's existing cash resources, it said.
For the year to June 2014 the business recorded sales of USD84 million, an operating profit of USD10 million and earnings before interest, taxation, depreciation and amortisation of USD12.9 million for the period.
"This investment represents a new and exciting frontier for our Insulation business in North America, giving us particular exposure to the residential sector. It is a tremendous opportunity for Kingspan to build upon the growing success of our existing Insulated Panel business throughout the region, and at a time when North America's focus on energy efficiency and security is at an all-time high," said Kingspan Chief Executive Gene Murtagh.
In May the company said it had seen a strong trading start to the year, with increased sales, supported a buoyant UK market and and improving market conditions in continental Europe.
The company, which manufacturer insulated panels and rigid insulation boards, said that group sales in the first four months of the year increased to EUR561 million, up 8% on the prior year, and 9% at constant exchange rates.
By Alice Attwood; aliceattwood@alliancenews.com; @AliceAtAlliance
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