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Kingspan complete E65m acquisition

Tuesday, September 11 10:21:19

Kingspan has announced the completion of the ThyssenKrupp Construction Group (TKA) acquisition in a deal worth a total of E65m.

The Irish confirmed the acquisition of ThyssenKrupp Construction Group, the insulation business of German steel giant ThyssenKrupp, for a total consideration of E65 million. The company acquired Dubai-based Rigidal Industries for E31.44 million.

German-based ThyssenKrupp's steel business operates seven separate sites across mainland Europe.

Kingspan products have already been used in the construction of major projects in the Gulf States such as Dubai airport and Dubai metro.

The group has increased its focus outside the Republic since the recession bit in 2007. Last year Britain and Northern Ireland accounted for 39 per cent of its E1.55 billion sales. Europe amounted to 38 per cent, North America 14 per cent and Australasia 4 per cent.

"With the TKA deal now completed, from here on it is all about execution and delivery. Given that the TKA business is currently loss-making, restructuring measures are required. We are confident that Kingspan can deliver on these and possibly in a shorter timeframe than has been suggested (the target is to get the TKA margin to group level by 2015). Along with the structural and cyclical arguments (respectively organic growth thanks to product development and the impact of building regulations, and trading margins well below the long-term average at present), we believe that the TKA deal adds an exciting third tier to what is an already impressive Kingspan investment case," Davy's analyst, Flor O'Donoghue said this morning.