In a deal among Irish producers of construction materials, Kingspan Group plc is boosting its European insulation business by paying 87 million euro ($110 million) to buy the holding company of Xtratherm Group and Hytherm Ltd.
Navan, Ireland-based Xtratherm manufactures polystyrene and polyisocyanurate board insulation products at plants in Navan and Chesterfield, England. The deal also includes Hytherm Ltd., an expanded PS products business in Navan.
Kingscourt, Ireland-based Kingspan will buy the holding company, Leonort Ltd., from the Hynes family. Kingspan also agreed to an 11 million euro ($14 million) purchase option on a building used by Xtratherm.
In 2005, Xtratherm earned pretax profit of 6 million euros ($7.6 million) on sales of 68 million euros ($86 million).
The deal gives Kingspan extra production capacity in Britain when demand for insulation products is due to rise there because of economic and regulatory pressures, according to Kingspan founder and Chief Executive Officer Gene Murtagh.
Most of Xtratherm's senior management will remain with the business.
In another recent deal, Kingspan has agreed to team up with Belgian plastics foam maker and converter Recticel SA to form a 50-50 joint venture, Kingspan Tarec Industrial Insulation.
Each company will contribute a small industrial thermal insulation plant: Kingspan's unit in Glossop, England, and Recticel's Tarec facility in Turnhout, Belgium. The venture is expected to achieve 2006 sales of 35 million euros ($44 million), according to Kingspan.
Kingspan, founded in 1972, now operates 22 European plants including 11 in Britain, four in Ireland, two each in Poland and the Benelux countries as well as single units in Germany, Hungary and the Czech Republic. It also runs two plants on the U.S. East Coast and one in Australia.