KGP.L Regulatory News (KGP)

Kingspan Group Plc

Acquisition

11 November 2010

Kingspan Group Plc ("Kingspan") announces the acquisition of CRH Insulation Europe, ("CIE")

Kingspan, the leading provider of low energy building solutions, is pleased to announce it will acquire 100% of the shares and assets of various companies which comprise the European insulation business of CRH Plc, the international building materials group. The agreement is conditional on a number of statutory approval processes.

CIE has market leading positions in polyisocyanuarate ("PIR") and expanded polystyrene ("EPS") products across Western Europe, and comprises 6 business units in 7 countries. The acquisition will substantially increase Kingspan's insulation footprint across Western Europe and complement its current Kooltherm® phenolic facility in Tiel, the Netherlands. The combined business will bolster Kingspan's position as the leading provider of high-performance insulation in Europe, with a greatly enhanced portfolio of solutions at a time when building regulations are becoming more rigorous in encouraging energy efficient buildings across Europe. Furthermore the integration of Kingspan's current businesses and those of CIE are expected to produce efficiencies and cost savings for the combined business. Whilst recognising the current weakness in many markets, this acquisition presents Kingspan with a unique opportunity to establish longer term market leading positions in Western Europe.

Consideration for the business is circa €120m, payable in cash on completion. The consideration is based on acquiring the business free of cash and bank debt, and will vary depending on the timing of completion and on actual debt or cash acquired. Further contingent consideration up to €6m may be payable depending on future earn-out conditions being met.

In the 12 months to 31 December 2009, CIE had combined revenues of €240.5m and Earnings before Interest, Tax, Depreciation and Amortisation ("EBITDA") excluding exceptional items and management charges of €19.8m. Operating Profits for the period were €10.6m excluding exceptional items and management charges. Furthermore, CIE had gross assets of €147.5m and net assets of €102.8m, excluding goodwill, at 31 December 2009. Net assets acquired are not expected to be materially different from this number at completion, and EBITDA for the current year is likely to be circa €11m. The current management teams of each of the business units of CIE will be transferring to Kingspan following completion which is expected in the first quarter of 2011.

The acquisition is expected to be earnings neutral in 2011 after restructuring costs, and thereafter earnings enhancing. The acquisition will be funded in full from existing Kingspan facilities. Following completion, some of the non-PIR business units included in the acquisition, each of which are quite autonomous, will be reviewed with a view to either enhancing their contribution to the combined business or, where there is limited strategic fit, their future disposal.

Gene Murtagh, Kingspan Chief Executive Officer, commented: "The acquisition of CRH Insulation Europe represents an excellent opportunity for Kingspan to assume a market leading position in Northern Europe and gives us the ability to develop and penetrate further into the wider European market. There are limited opportunities to acquire such market leading positions, particularly in high performance PIR, and this acquisition will provide a platform to drive growth and conversion to our products across Europe for many years to come in a positive regulatory environment."

Note to Editors: CIE has PIR facilities in Netherlands and United Kingdom, operating under the "Ecotherm" brand. CIE has EPS facilities in Finland, Sweden, Denmark, (together operating under the "Thermisol" brand), Germany ("Unidek Gefinex"), Netherlands ("Unidek"), United Kingdom ("Springvale") and Ireland ("Aerobord"). Kingspan will not be acquiring CRH's EPS granulate business, "Unipol" in the Netherlands, EPS board business "Termo Organika" in Poland, or CRH's interest in the "Jackon" extruded polystyrene ("XPS") business in Germany.

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