Insulation industry news from Global Insulation

Slovenia: Kingspan has submitted the highest binding bid for 97% of its troubled Slovenian peer Trimo, but its creditor banks are reluctant to sell it, according to local media.

According to unofficial information of a local daily newspaper, Dnevnik, the sale adviser and Trimo's major shareholder, state-controlled lender Nova Ljubljanska banka (NLB), is in favour of the sale, but the other owners believe that the offered price of Euro25 – 30m is too low. Trimo's two other bidders, Metroll Australia and Innova Capital, have made less generous offers. All three bidders have already been invited to improve their bids.

"The sale process is ongoing and currently we are in the stage of negotiations with potential buyers," said NLB. It added that it has not received any other instructions by the owners on how to proceed. "If the owners would like to stop the sale and this is supported by the majority, of course they can revoke the decisions already taken."

Trimo was 90.81% acquired by a group of local banks under a debt-for-equity swap in April 2014. Most of the local banks believe that the sale should be postponed for a few years when the ongoing restructuring takes effect and Trimo could be sold for a higher price, according to Dnevnik. They also want a buyer with long-term plans. Moreover, the Central Bank has put the group in the list of companies worth restructuring.

NLB's efforts to sell the company are supported mainly by banks controlled by foreign parents. NLB would get between Euro5 – 6m for its 20% stake in Trimo, considering the offered price.

Russia: TechnoNicol Corp, a manufacturer of roofing, waterproofing and thermal insulation materials, has agreed to acquire an additional 54.1% stake in Russia’s Krovlya Ooo, a building materials company. After the transaction, TechnoNicol will own a 98.25% stake in Krovlya.

UK/Canada: Kingspan Group has announced that it will buy the building products division of Vicwest Inc for US$136m in cash, inclusive of debt and reorganisation costs.

Kingspan said that the acquisition will be structured as the purchase by Kingspan of Vicwest and the simultaneous transfer of the Westeel business and assets to Ag Growth International. The total estimated consideration payable is US$333m, of which Kingspan will fund US$137m and AGI will fund US$196m. The acquisition of the building products business will be funded from Kingspan's existing credit facilities.

The division being bought comprises three insulation panel production plants and a number of profiling facilities across Canada and the US. Revenues for the year that ended 31 December 2013 were US$224m and pro forma earnings before interest, taxes, depreciation and amortisation (EBITDA) was US$11.7m. The unit had gross assets of US$111m at 30 June 2014.

US: Installed Building Products has acquired Installed Building Solutions (IBS), an installer of fibreglass insulation, spray foam insulation and waterproofing products. IBS primarily serves select markets across Minnesota, Wisconsin and North Dakota. Its sales for the 12 months that ended 30 September 2014 were approximately US$17.4m.

US: Element Partners, a growth equity firm focused on investing in businesses providing innovative products, software and services to the energy and industrial markets, has executed a definitive agreement to sell Icynene to FFL Partners.

Established in 1986, Icynene manufactures and supplies spray foam insulation. In the past 25 years, more than 3Bnft² of Icynene spray foam insulation has been installed in nearly 500,000 residential and commercial projects.

Ireland/US: Irish insulation and building materials manufacturer Kingspan has completed the acquisition of US firm Pactiv. The US$82m deal has been funded from Kingspan's existing cash resources.

Pactiv produces a range of extruded polystyrene (XPS) insulation products under the GreenGuard brand, which it supplies throughout the US from its manufacturing base in Virginia. Pactiv had sales of US$84m in the year to June 2014 and recorded an operating profit of US$10m in the period. The enterprise value is US$82m, of which US$72m is payable in cash on completion plus US$10m of working capital. Gross assets being acquired are US$30m.

Turkey: Saint-Gobain has finalised a deal to buy Atlas Zimpara, a longstanding partner company that makes sandpaper, sanding belts, discs and other abrasive materials. The company operates from a plant in Gebze, an industrial area close to Istanbul. Its products are supplied to the construction, automotive repair and industrial supplies.

Saint-Gobain said that the deal will strengthen its presence in Turkey, where it recently began operating a new organic grinding wheel plant at Eskiehir, 300km south-east of Istanbul. It added that the deal allows it to serve customers from a local industrial base and ‘marks an important stage in the Group's development in fast-growing countries.’

Finland: CVC Capital Partners has acquired Paroc Group for about Euro700m. Paroc produces stone wool insulation in the Nordic and Baltic regions, has approximately 2100 employees and a pan-European sales presence supported by nine production facilities in Finland, Sweden, Lithuania, Poland and Russia.

In a successful 5-year period under the ownership of its current shareholder group, Paroc has grown its revenues from Euro317m in 2009 to Euro433m in 2013 and EBITDA from Euro46m to Euro80m, which has been achieved through organic growth. The development of the group’s higher-value, higher-margin technical insulation division, aided by investment in the group’s production plant in Trzemeszno, Poland, has represented one of the group’s success stories during this period. Most recently, Paroc has invested in a new facility in Izoplit, Russia, enabling the expansion of existing sales into the rapidly growing Russian market.

“The last five years have been successful, especially given the challenging economic backdrop and we are grateful to our former owners for their support during this period,” said Kari Lehtinen, CEO of Paroc. “We see a strong future for our business, with recovery in many of our markets expected in the coming years, and with our presence in the fast-growing Russian market. We look forward to taking Paroc forward in close cooperation with CVC, which is supportive of our strategy. CVC offers us a depth of experience and a strong track record with value-creating investments, expertise in the building materials sector and in the Nordic region. We are excited to share with CVC the next phase of our growth.”

The transaction has been approved by Paroc’s current shareholder group and the completion of the transaction is subject only to the receipt of customary competition clearances.

US: Distribution International Inc, a portfolio company of Audax Group Inc and the CapStreet Group LLC has acquired Mechanical Insulation Supply Inc, a distributor of mechanical industrial insulation and accessories, heating, ventilation and air conditioning (HVAC) products and refractory products and accessories.

Italy: TechnoNicol has strengthened its position in Western Europe with the acquisition of an Italian insulation and waterproofing producer, Italiana Membrane. TechnoNicol has said that it intends to invest in small upgrades aimed at increasing production efficiency and reducing costs at its new Italian business over the next two years.

Italiana Membrane runs several production plants that manufacture a range of roofing and waterproofing bitumen modified membranes, which are sold in Italy and 50 other countries. The company exports around 35% of its output, mainly to markets in North and Latin America, Scandinavia and the Middle East. In 2011, its annual turnover amounted to Euro50m.

"The acquisition of Italiana Membrane allows us to not only increase exports, but it gives TechnoNicol the opportunity to take a significant niche in the western markets," said TechnoNicol's president Sergei Kolesnikov. Prior to the takeover, TechnoNicol held talks with Italian trade unions and reached an agreement on the number of Italiana Membrane workers it would employ and future pay levels.

The Italian firm's main plant has a production capacity of 20Mm2/yr. It operates three polymer-bitumen material lines; one line produces roofing shingles made of APP modified bitumen reinforced with non-woven polyester and glass fibre; another turning out heat insulation and waterproofing panels and a sixth line producing waterproofing liquids.