Insulation industry news from Global Insulation

Spain: Coemac, which was previously known as Uralita SA, has completed the sale of its insulation division to financial creditors led by KKR, an American multinational private equity company. Financial creditors acquired 90% of URSA Insulation Holding BV, while Coemac kept a 10% stake, according to Reuters.

US: USI, a national construction services provider of installed insulation and related services to builders, contractors and homeowners, has announced the acquisition of Smith Insulation, a Louisburg, North Carolina-based full-line insulation services contractor.

Founded in 1979 by Timothy Smith, family-run Smith Insulation has shown steady growth. The company employs approximately 35 personnel and serves the Raleigh, Durham and Roanoke Rapids markets. After closing, Smith will become branch manager and Duane Smith will maintain his current role as production manager.

In addition to the North Carolina markets served by Smith Insulation, USI has an existing branch serving western North Carolina and parts of Virginia. "We are excited how this acquisition further increases our presence in North Carolina," said Bill Varner, president and CEO of USI. "Bringing Smith's expertise, valued people and assets to USI is a significant opportunity for us. We expect a smooth transition and enhanced value for both our current and future customers."

"Joining forces with USI provides us with a whole new level of resources. USI shares our values of teamwork, trust and integrity that are so crucial in a relationship-driven industry. Our combined best practices and focus on service leaves me very optimistic about the future," said Timothy Smith.

Europe: The European Commission (EC) has opened an in-depth investigation to assess whether the proposed acquisition by Mondi of two industrial packaging plants currently owned by Walki is in line with the EU Merger Regulation.

Mondi is a vertically integrated packaging and paper manufacturer that operates plants across Europe that manufacture extrusion coating products, such as those used for insulation production. The plants Mondi intends to buy from Walki also manufacture extrusion coating products. The EC has concerns that the removal of a key competitor may lead to less choice and higher prices for customers. The EC now has 90 working days, until 18 January 2016, to investigate whether these initial concerns are confirmed. The opening of an in-depth investigation does not prejudge the outcome of the investigation.

"The proposed merger could remove a key competitor for several types of packaging material. These are used in everyday items such as food packaging. I am concerned that the merger would lead to higher prices and less choice for these companies' clients and that the price increases could ultimately be passed on to consumers," said commissioner Margrethe Vestager, who is in charge of competition policy.

The EC's initial investigation has shown that the proposed acquisition of Walki's plants may remove a major competitive constraint on Mondi. Remaining competitors would have considerably lower production capacity than the merged entity and may not be able to match its product offering or proximity to key customers. The EC has concerns that these competitors may be unable to exert sufficient competitive constraint on the behaviour of the merged entity. This risks leading to a reduction of choice for customers and potentially to price increases for the products concerned.

US: Installed Building Products (IBP) has acquired Eastern Contractor Services based in New Jersey, which also operates as Parker Insulation and Building Products in Nederland, Texas, according to Dow Jones.

Eastern is a well-established company with locations in Flanders and Tuckerton, New Jersey, with a primary focus on fibreglass and spray foam insulation installations. Parker's product offerings include fibreglass and spray foam insulation as well as garage doors and other complementary products, in the south-eastern Texas market. Both Eastern and Parker focus on new single-family and multi-family residential construction end markets.

"We are pleased to announce our sixth acquisition of 2015 with trailing twelve month sales of approximately US$23m," said Jeff Edwards, chairman and CEO. "We have created a compelling acquisition platform and these established branch locations will deepen our presence in New Jersey, the New York metropolitan area and Texas. This acquisition brings our total acquired revenue in 2015 to approximately US$85m as we continue to pursue excellent acquisition opportunities in our target markets. We remain confident in our ability to execute on our growth strategy of utilising a disciplined approach to valuations and pricing."

US: Engineered thermal solution providers Thermon Group Holdings Inc has announced that one of its wholly-owned, indirect subsidiaries, Thermon, has acquired 100% of the equity interests of Industrial Process Insulators Inc (IPI) for US$21.75m, effective from 31 July 2015, according to Dow Jones.

IPI is an insulation contractor serving the refining, petrochemical, power and energy, marine and pulp and paper industries in the US, with a significant presence in the Texas and Louisiana Gulf Coast region. For the unaudited 12 month period that ended on 30 June 2015, IPI generated around a revenue of around US$22m. The IPI management team, led by Darrell Kunk and Brian Kunk, will continue to operate the business following the closing of the transaction.

"For over 15 years, IPI has been delivering high quality, responsive and, most importantly, safe, thermal insulation solutions to its industrial customers in the Gulf Coast region, including as a subcontractor of Thermon. We believe that IPI is an ideal complement to Thermon's existing installation services offering and will enhance our ability to execute turnkey heat tracing solutions. We expect the acquisition of IPI to enhance our ability to sell our core heat tracing products and grow our installed base. The acquisition is consistent with our strategy of pursuing organic and inorganic growth opportunities within and adjacent to our core thermal solutions business," said Rodney Bingham, president and CEO of Thermon. "We have known and worked with Darrell and Brian Kunk since the early 1990s and are pleased that they have agreed to multi-year employment agreements with Thermon. We look forward to welcoming IPI employees into the Thermon family."

"We have a great deal of respect for the Thermon organisation given the long track record of involvement between our two companies. We are excited to be partnering with Thermon and look forward to continued success," said Darrell Kunk, CEO of IPI.

US: Dow Jones Institutional News has reported that Installed Building Products (IBP) has acquired EcoLogic Energy Solutions, which is based in Stamford, Connecticut.

EcoLogic is primarily an installer of spray foam and fibreglass insulation serving the Connecticut, New York and Northern New Jersey markets. Approximately half of EcoLogic's sales are in the new residential end market with the remainder split between commercial and repair and remodel activity. EcoLogic's sales for the 12 months that ended on 30 April 2015 were approximately US$6m.

"We are pleased to announce the addition of the EcoLogic team as we continue to strengthen our position in the New York Metropolitan area," said Jeff Edwards, chairman and CEO of IBP. "EcoLogic complements our strategic growth objectives and further diversifies our product and end market exposure. We expect this transaction to be immediately accretive as we integrate these assets onto our platform. Building on our robust acquisition activity to date, we remain committed to further capitalising on the significant expansion opportunities in our strong deal pipeline to continue improving our business."

US: Distribution International Inc (DI), a portfolio company of global private equity firm Advent International active in the mechanical insulation market, has acquired Insulation Fabricators Inc (IFI), which produces and distributes thermal and acoustical insulation products.

Headquartered in Hammond, Indiana, IFI expands DI's Midwestern footprint with additional locations in Ohio and West Virginia. The acquisition also extends DI's service range and features fabrication capabilities for a wide range of applications such as pipes, vessels, ductwork and boilers. The acquisition complements the existing breadth and depth of DI's inventory and enhances its ability to source any product for its customers.

"Outstanding customer experience has always been our mission," said Celeste Mastin, DI CEO. "The acquisition of IFI reinforces our dedication to providing clients with critical products and services anywhere across our growing footprint. Having completed 12 acquisitions over four years strengthens our strategy and supports our service goals."

"DI's customer centric focus parallels our own commitment and service philosophy at IFI. Since founding IFI in 1979, we have made customer service the hub of this business and we are proud of what we have built with the help of our employees. The opportunity to join DI, coupled with the resources that will now be available, allows us to further enhance the customer experience and better serve project needs," said IFI founder Larry McNabb and president and CEO Ted McNabb in a joint statement.

UK: Gloucester-based Advanced Insulation, which manufactures technical coatings and specialised passive fire protection and thermal insulation materials, has acquired Nottinghamshire-based Covertherm Limited, a manufacturer of insulation jackets. Covertherm's range of bespoke thermal insulation jacket and cover solutions will complement Advanced Insulation's range of flexible fire protection jackets.

"At a time when many manufacturers are looking abroad for low-cost production solutions, we're looking to reverse that trend. This acquisition will provide a UK manufacturing base for our ContraFlex range of passive fire insulation jackets, which will now be produced by Covertherm for the UK and export markets," said Advanced Insulation's managing director Andrew Bennion. "It is also an opportunity for Covertherm's own portfolio to be introduced to Advanced Insulation's other jacket manufacturing bases and we expect the company to grow significantly over the next 12 months."

The new UK manufacturing facility adds to already established production plants in the UAE, Kazakhstan and South Korea and will provide increased production capacity that will help to cope with the increasing demand for ContraFlex products.

Ireland/Canada: Kingspan has obtained approval for the acquisition of Vicwest Building Products. The Irish insulation, building fabric and solar-integrated building envelopes company said that it has reached a consent agreement with the Canadian Competition Bureau, which requires the disposal of Kingspan's insulated metal panel facility at Hamilton, Ontario following the completion of the transaction.

In November 2014 Kingspan announced that it was buying the building products division of Vicwest Inc for US$136m in cash, inclusive of debt and reorganisation costs. The total estimated consideration payable is US$307m, of which Kingspan will fund US$126m and AGI will fund US$181m. The transaction is expected to complete imminently.

UK: Two management buyouts (MBOs) at Synbra Group have resulted in the establishment of the UK's largest expanded polystyrene (EPS) producer.

With the financial backing of Mobeus Equity Partners, the management of Styropack and Jablite have successfully completed MBOs. The new company is owned by Richard Lee, the former CEO of Styropack, as well as Ken Hutchins, who now acts as finance director. The two other owners are Wayne Brown, who will oversee operations and Mobeus' John Colley, who has been named chairman.

The new owners have assured customers that business will proceed as usual, adding that they plan to further strengthen the two companies' market share in the future. "We are absolutely determined to grow our new company into a larger, thriving business whose products are always the first choice for insulation and packaging in the UK," said Lee. Styropack produces packaging solutions for the shipping, automotive, pharmaceutical, fishery and gardening segments, while Jablite specialises in the manufacture of EPS insulation.