KGP.L Regulatory News (KGP)

26 Jun 2006 10:05

Kingspan Group PLC26 June 2006 Kingspan Group plc Acquisition and Trading Update 26th June 2006 Kingspan Group plc ("Kingspan") announces acquisition of the Xtratherm Group ("Xtratherm") Following the previous announcement of 9th May, Kingspan, a leading manufacturerof an integrated range of products for the construction industry, is pleased toannounce it has entered into an agreement to acquire 100% of Leanort Ltd, aholding company for the Hytherm and Xtratherm businesses, from the Hynes familyand others. The agreement is subject to certain conditions including CompetitionAuthority approval. Xtratherm is a leading polyisocyanurate ("PIR") rigid board insulationmanufacturer in the UK and Irish markets, operating from Chesterfield in Britainand Navan, Co Meath in Ireland. The business also produces polystyrene ("PS")board insulation products in Ireland. The acquisition gives Kingspan access toproduction capacity in the United Kingdom at a time when demand for insulationproducts is expected to increase due to economic and regulatory pressures. Total potential consideration is €87m, being €67m for the acquisition of sharesplus up to €20m of debt to be assumed at completion. Payments will be structuredas follows: Initial consideration payable in cash for the shares at completion of €46.7m.Xtratherm is expected to have debt at completion of no more than €20m, givingtotal consideration at completion of up to €66.7m. A further amount of €20.3m will be payable based on the exercise of put and calloptions over the shares of one of the subsidiary companies at a date no earlierthan 1 April 2007. In addition, Kingspan will enter into an option agreement to purchase a UKproperty used by Xtratherm for €11m, exercisable from the grant date untilSeptember 2009. Xtratherm had consolidated revenue of €68m, gross assets of €46m, profit beforetaxation of €6m, and EBITDA of €7.8m based on audited financial statements forthe year ended 31 December 2005. EBIT for the business was €6.4m. Net assets areexpected to be in excess of €17m at completion. Most of the current seniorXtratherm management team will be staying in the business following completion. The acquisition, which will be funded in full from existing Kingspan resources,will result in up to €20m of future capital expenditure savings, and is expectedto be earnings enhancing from 2007. Gene Murtagh, Kingspan CEO, comments "The acquisition of Xtratherm represents anexcellent opportunity for Kingspan to bolster its presence in the UK and Irishinsulation markets during a dynamic time for the insulation industry. Theincreased output and spare capacity which Xtratherm brings to Kingspanrepresents an excellent opportunity to generate operational and capitalexpenditure savings and to harness the next wave of demand, driven by theregulatory and energy saving requirements of the market. The acquisition, whencombined with Kingspan's current product portfolio, will further enhanceKingspan's position as the leading European high performance insulationmanufacturer." Finally the Board of Kingspan is pleased to report that trading throughout theGroup continues in line with the levels indicated in the Chairman's AGMStatement made on the 25th May and the analyst briefing held the same day. The next trading update will be provided with the interim results due forrelease on the 5th September 2006. An analyst briefing / shareholder conference call is scheduled to take place at11.00am this morning. Please contact Celeste O'Brien of Goodbody Stockbrokersat + 353 1 641 9292 or celeste.o'brien@goodbody.ie to access the conference calldetails before 10.45am. For further information contact: Murray Consultants +353 1 4980300 James Dunny Buchanan Communications +44 (0) 20 7466 5000 Tim Thompson/Jeremy Garcia This information is provided by RNS The company news service from the London Stock Exchange