REG - Kingspan Group PLC - Acquisition

KingspanAnnouncement

18/07/2023 07:00

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RNS Number : 2908G  Kingspan Group PLC  17 July 2023

 

Kingspan Group plc

 

Acquisition

 

Inside Information

 

17 July 2023

 

Kingspan Group plc ("Kingspan") announces the acquisition of a majority stake
in Steico SE

 

Kingspan Group plc, the global leader in high performance insulation and
building envelope solutions, is pleased to announce that it has entered into
an agreement with Schramek GmbH ("Schramek") to acquire c.51% of the shares of
Steico SE ("Steico"), with an option to acquire a further c.10% of shares in
Steico in the future.

 

Steico is the world leader in natural insulation and wood-based building
envelope products, based in Germany and listed on the unofficial markets of
several German Stock Exchanges. It has a very well invested asset base, with
four large production sites comprising 27 lines situated in Poland and France,
including additional capacity nearing completion with up to EUR200m revenue
headroom.

 

Steico had audited operating revenues of EUR445m in the 12 months to 31
December 2022 and EBITDA of EUR90m in the same period.  As at June 2023,
Steico guided 2023 revenues of c.EUR378m at an EBIT margin of 8% - 10% (FY22
14.6%).  As at 31 December 2022, Steico had gross assets of EUR509m.

 

The initial consideration for the shares will be EUR35 per share, plus
potential deferred consideration of up to a further EUR35 per share contingent
on achievement of specified thresholds with a material uplift in
profitability.  The initial consideration of approximately EUR251.4m will be
satisfied on completion, with 25% of the consideration potentially being
exchanged for new shares in Kingspan (subject to Kingspan share price at
completion).  The consideration payable under the put and call option to
acquire Schramek's remaining c. 10% in Steico is for a capped amount based on
a multiple of future earnings.

The acquisition is expected to be earnings neutral initially, based on
Kingspan consensus EPS for 2023 and Steico guidance for 2023.

 

In addition to Steico's existing ambitious growth plans we anticipate
significant long term leverage via the Kingspan sales channels.  The existing
Steico executive management team will be retained in the business, and will
continue to manage and develop the business.  Upon closing, Kingspan will
seek fair representation on Steico's administrative board.

 

The acquisition is conditional on regulatory clearance, and is expected to
complete in early 2024. Following completion, Steico will continue to maintain
its listings on the German Stock Exchanges.

 

 

Gene Murtagh, Kingspan Chief Executive Officer, commented:

 

"The acquisition of a majority stake in Steico represents an exciting next
step in our strategy to provide the full spectrum of insulation products.
Its suite of wood-based building envelope solutions broadens our ability to
enable our customers to meet their sustainability and energy performance
needs. 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."

 

Udo Schramek, Steico Chief Executive Officer, stated:

 

"It has been a great honour to lead the team at Steico to become the
pre-eminent global supplier of wood-based insulation. We are now entering the
next phase of growth and are very enthusiastic about the collaboration
opportunities Kingspan brings, in both the existing Steico range and across
the Kingspan portfolio and geographies. I am excited about the future for
Steico and about being invested in the future growth of both companies."

 

 

Kingspan will hold an investor call at 8.30am IST on Tuesday 18 July 2023 to
discuss the acquisition.

 

Operator Assisted Dial-In:
United Kingdom (Local): +44 20 4587 0498
United Kingdom (Toll-Free): +44 800 358 1035
Access Code: 022503

 

Further call details will be available shortly on the Investor Relations
section of our website www.kingspangroup.com (http://www.kingspangroup.com) .
A recording of this conference call will be made available. For further
information about the conference call please contact: ir@kingspan.com
(mailto:ir@kingspan.com) or +353 (0)42 969 8000.

 

 

Lorcan Dowd

Company Secretary

+ 353 (0)42 9698000

 

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