Kingspan, the Co Cavan building materials firm, yesterday acquired a US flooring company for $120 million (€199.23 million).
Tate Global Corporation employs 900 people at manufacturing plants in Maryland and Pennsylvania.
Kingspan's finance director, Mr Dermot Mulvihill, said the company would enhance its earnings next year after interest and goodwill write-offs.
Its stock closed seven cents stronger at €3.65 in thin trade on the Dublin exchange yesterday.
Tate claims to have about 60 per cent of the raised access flooring market in the US. The flooring allows for the easy laying of electronic cabling, crucial for IT networks. Mr Mulvihill said Kingspan saw two growth opportunities for Tate in the US market, where 10 per cent of high-rise offices are fitted with such flooring. The comparable figure in Europe and Asia was 60 per cent. Kingspan also wanted to grow Tate's share of the US data-centre business.
Tate generated profits before interest and tax of $10.9 million in the year to May 2000. It had sales of $109 million in the period. The company's net assets were worth $16.6 million on May 30th. Goodwill on acquisition was estimated at $80 million.
The consideration includes a $100 million cash payment and bank-funded debt of up to $20 million.
Tate would require additional capacity by 2003, Mr Mulvihill said. Kingspan ultimately wanted to use the company to sell products in the US from its existing range. The company was gearing up production capacity to cater for an anticipated rise in the demand in the medium and long term.
When asked if Kingspan planned further acquisitions, he said: "I think we'd like to take our breath with this one in terms of the US anyway."
The company was no longer involved in discussions to acquire a firm owned by the Polish state treasury, he said.
In May, Kingspan's chairman and chief executive, Mr Eugene Murtagh, said he expected to conclude the purchase by the end of the year. Kingspan wanted to reduce the Polish firm's staff to 200 people from 1,000.
In 1998 Kingspan acquired a British-based maker of similar flooring, Hewetson, for £38.1 million.
That deal prompted the temporary departure from the board of a Kingspan director, Mr Brendan Murtagh, a brother of its chairman, after people connected to his sons purchased its stock ahead of the purchase. Mr Brendan Murtagh has now rejoined the board.
