Projected boost for Kingspan after acquiring stake in Isoeste
Building materials giant Kingspan has announced that it has acquired 51% of a Brazilian manufacturing firm. The Cavan firm has bought a majority stake of firm Isoeste Construtivos Isotermicos.
Kingspan employs nearly 900 people in Northern Ireland and is best known as the sponsor of the Ulster Rugby stadium in Belfast.
Isoeste, an insulated panel manufacturer in Brazil, operates from four sites, and has approximately 630 employees.
The company has forecast sales for 2017 of circa R$500m (£116m).
Assuming an earnings before interest and tax margin (EBIT) of 10%, analysts at Investec, estimate that the deal will add around 3% to the 2018 EBIT at Kingspan, and around 1% to the company's earnings per share.
Commenting on the announcement, Gene Murtagh, chief executive of Kingspan, said that the company was delighted to create the partnership with the founders of Isoeste, the number one player in Brazil's insulated panels market.
"Together with our recent investments in Colombia and Mexico, this acquisition firmly places Kingspan in a market leading position across Latin America, with a strong platform for further expansion in the region," Mr Murtage said.
Yesterday shares in Kingspan rose almost 3% to €34.6050 on the Irish Stock Exchange.
Last month, Kingspan shrugged off concerns over how political turmoil in the UK could impact the construction industry.
In their half year results released last month Kingspan announced that operating profit at the company increased 6% to €177.8m (£155m) year-on-year in the six months to June 30.
The results were driven by acquisitions, which contributed 10% to sales growth during the period, and insulated panel sales growth which increased 17% year-on-year.