KINGSPAN, the Cavan-based building materials group, has acquired Kooltherm Holdings, a Welsh-based manufacturer of insulation products, for £9.5 million sterling.
Mr Eugene Murtagh Kingspan's chairman and chief executive, said the new technology developed by Kooltherm is "very important for the whole group", particularly when the technology is transferred to the group's other products.
Kooltherm's special fire-rated performance products are enjoying "an ever improving specification rating against fibrous insulated products", Kingspan said.
Kooltherm has had a cyclical record because it was owned by a number of different companies but it developed what is described as a "unique phenolic foam technology" which was developed by the company and BP Chemicals.
These products are protected by patents and licences which provide the "key to the level of success currently enjoyed by Kooltherm". Product sales have doubled in the last four years.
Kooltherm sales amounted to £20 million sterling in the 15 months ended June, 1995, and these are projected to rise to £20 million in the year to June 1996.
Insulation boards had sales of £8 million in 1994-5 and products associated with the process, petrochemical and heating and ventilation industries generated £12 million.
The UK accounted for £11 million, continental Europe £1 million, the Far East and Asia £6 million. Around £4 million of its sales are supplied into the same market segment as Kingspan in Britain.
Kingspan will now be selling its own products through Kooltherm's outlets, particularly in the Far East.
Mr Murtagh said the acquisition would be immediately earnings enhancing. The consideration consists of £6.2 million cash and the discharge of a loan from the vendors of £3.3 million.
Profit before interest and tax amounted to £875,000, while pretax profit came to £329,000 in 1994-5. Kingspan said trading since then "has improved considerably".
Kooltherm had net liabilities of £26,000 at the end of June, 1995, after taking a company loan of £6.2 million (Kingspan is assuming £3.3 million) into account.
Mr Murtagh reckons that Kingspan is taking over £4.5 million in assets but there will be goodwill of £5 million.
Kooltherm, which employs 215, of whom 190 are in the UK, has been purchased from Sentrachem International, a South African-based chemical group.
It has plants at Barry in south Wales and at Glossop in Derbyshire, and two subsidiaries in Hong Kong (51 per cent interest) and Singapore (85 per cent).
Kingspan is understood to be still in talks with Ward Building Systems, a British building materials firm which is up for sale. Other companies are also interested.
