Insulation industry news from Global Insulation

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.

Ireland: Kingspan has reported a near 30% increase in group sales for the first four months of 2015, driven by favourable currency movements and strong performances in its core markets of the UK and North America. The building materials and insulation products provider said that sales in the first four months reached Euro719m, 28% ahead of the same period of 2014.

Kingspan said that underlying profitability has been strong, "Complemented further by favourable translation, reflecting Euro/Sterling and Euro/Dollar exchange rates, which are significantly better than the average rates of the last 10 years." Management said that current trading patterns coupled with a strong order backlog point to a strong first half for the group, despite flat conditions in mainland Europe and 'impending weakness' in both Canada and Australia.

"The combination of recent development activity, growing conversion, a strong innovation pipeline and the increasing emphasis worldwide on energy-efficiency leave us confident about Kingspan's longer term future," said management.

Earlier in 2015, Kingspan closed its Euro315m takeover of Belgian Joris Ide. While the deal helped push the group's net debt levels up by Euro273m to almost Euro400m, Kingspan still has a 'robust' funding position, with Euro425m of lending facilities still undrawn.

Sales in Kingspan's core insulated panels division increased by 28% year-on-year in the first four months of 2015, aided by a 3% boost from acquisitions. Insulation board sales revenues were up by 40% and access floors saw a 19% revenue rise. The environmental division saw a 9% sales rise.

The group said recently that it was eyeing up Latin America as a likely next step in its ongoing geographical expansion, with some kind of presence likely to be taken in Brazil and Mexico in the next few years.

Ireland: Kingspan has reported a rise in its full year pre-tax profit as strength in the UK and North America lifted its revenue. The pre-tax profit in 2014 rose to Euro128m from Euro102m in 2013. Its 2014 revenue rose to Euro1.9bn, up from Euro1.8bn in 2013.

Belgium: Kingspan has acquired full control of the industrial insulation products joint venture that it shares with Belgium's Recticel. Previously, the two groups each owned 50% of Kingspan Tarec Industrial Insulation (KTII). Kingspan has now taken full control of KTII via an estimated Euro8.5m purchase.

Kingspan and Recticel launched their joint venture in 2006, combining their respective industrial insulation businesses in the process. KTII is a niche operator, producing premium performance pipe insulation products for petrochemical operations and the cool truck industry. The business had revenues of around Euro31m in 2014.

UK: Kingspan Group has agreed with Ergon Capital Partners II NV and Bremhove NV to acquire Steel Partners NV, a holding company of the Joris Ide Group. Joris Ide is a pan-European manufacturer and supplier of insulated panels, profiles and related accessories, with leading market positions in France, Belgium, the Netherlands and Luxembourg.

The acquisition will cost Euro315m, inclusive of debt. It will be satisfied on completion partly in cash and by the assumption of debt, with the balance of the consideration satisfied by the issue of three million shares in Kingspan Group to Bremhove NV, which is the holding company of the founder and major shareholder Joris Ide.

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.

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.

UK: Kingspan has reported 7% year-on-year growth in its third-quarter 2014 revenue, partly due to an upturn in the UK property market. It now expects to deliver a full-year trading profit in the region of Euro144m, up by 17% from the year ago period. Net debt at the end of September 2014 was Euro39.1m lower than at the same point in 2013, at Euro108m.

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.

Ireland: Kingspan has announced that its profit rose by 24% year-on-year to Euro69m in the first half of 2014 as revenues rose by 4% to Euro890m. The company said that the improvement came due to rising sales of its key products, despite conditions remaining tough in the European construction sector.

"Kingspan has delivered strong growth in profitability, notwithstanding a tougher EU construction sector in the second quarter and a global economic recovery that remains weak. Our order book carried good momentum into the second half of the year, driven by continued growth in the demand for low energy buildings," said Gene Murtagh, Chief Executive of Kingspan.

Insulated panel sales were up by 9% and trading profit was up by 30%, reflecting what the company called 'continuing penetration gains, a positive business mix and some improvement in end markets in certain regions". Insulation board sales were up 1% and trading profit was up by 32%, with a good performance in the UK in particular.