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Kingspan Group PLC on Tuesday said it has acquired, for over €250 million, a majority stake in Steico SE from which it anticipates ‘significant long term leverage’. Kingspan said it has agreed with Vienna-based timber merchant Schramek GmbH to acquire about 51% of the shares in Steico, a Feldkirchen, Germany-based manufacturer of flexible wood fibre insulation products. The Kingscourt, Ireland-based building materials company will pay approximately €251.4 million initial consideration, or €35 per share. It also intends to pay a further €35 per share if certain thresholds are achieved along with ‘a material uplift in profitability’. Shares in Kingspan were up 3.4% at €71.50 in London on Tuesday. Kingspan said it also has the option to acquire a further stake of approximately 10% in Steico. Gene Murtagh, Kingspan’s chief executive officer, said the acquisition ‘represents an exciting next step in our strategy to provide the full spectrum of insulation products’. ‘Kingspan’s global routes to market, paired with our drive to innovate and widen the applications of Steico’s current technologies, are key to our plans to bring Steico bio-based solutions to the next level,’ he added. Kingspan said Steico ‘has a very well invested asset base’ with revenue headroom worth up to €200 million. Steico reported €445 million in operating revenue for 2022, along with EUR 90 million in earnings before interest, tax, depreciation and amortisation and a 14.6% Ebit margin. In June it predicted €378 million gross revenue for 2023, with an 8% to 10% Ebit margin. ‘In addition to Steico’s existing ambitious growth plans we anticipate significant long term leverage via the Kingspan sales channels,’ Kingspan commented. Copyright 2023 Alliance News Ltd. All Rights Reserved.
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