Kingspan buys Pactiv's US building insulation division

Monday 18 August 2014 16.32
Kingspan deal for US building insulation business of Pactiv
Kingspan deal for US building insulation business of Pactiv

Building materials group Kingspan has agreed a deal to buy the US building insulation business of Pactiv for $82m.

Pactiv produces a range of insulation products under the GreenGuard brand which it sells throughout the US from its manufacturing base in Virginia. The business had sales of $84m for the year to June 2014 and reported operating profits of $10m. 

Kingspan said it will fund the deal through its existing cash resources.

The deal is still subject to local approval of licence and permit transfers, the Co Cavan-based firm added.

Shares in the company were up over 3% in Dublin trade this afternoon.

Analysts said the deal was an attractive acquisition, which will enable the company increase its exposure to a growing North American market at an attractive multiple.

Kingspan's CEO Gene Murtagh said that the deal represents a "new and exciting frontier" for its insulation business in North America, giving the company particular exposure to the residential sector. 

"It is a tremendous opportunity for Kingspan to build upon the growing success of our existing insulated panel business throughout the region, and at a time when North America's focus on energy efficiency and security is at an all-time high, Mr Murtagh added.