Two executives who led a 1986 management buyout of Cape Insulations's Irish business are to realise almost €30 million (£23.6 million) after selling what is now known as Capco to British building materials group SIG.
SIG is paying £26.7 million sterling (€42.55 million) in cash for Capco. Mr Terence Hamden will receive over €16.5 million for his 39 per cent stake, while another director, Mr Brian Craig, will get more than €12.5 million for his 29 per cent.
Neither executive was available for comment.
Distribution group DCC will get €7.9 million for its 18.5 per cent Capco stake. Before it became a distribution company, DCC was a venture capital operation and was the main financial backer of the 1986 MBO that created Capco. DCC's 1986 investment in Capco was €220,000 and it will book a €6 million profit from its investment.
Capco is involved in a variety of activities connected with the construction industry - from insulation products, ceilings, partitions and industrial painting through its JS McCarthy subsidiary, roof tiles and slates through Irish Slate Products, and office equipment.
It is understood that about two thirds of Capco's turnover - £77 million (€97.8 million) in the year to March 2001 came from sales of insulation, ceiling and partition products.
The turnover figure was an 11 per cent increase over the £63 million of the previous year. Of the £77 million in sales, £42 million (€53.3 million) came from operations in the Republic, with the balance from Capco's business in the UK and Northern Ireland.
Pre-tax profits doubled last year to £4.4 million (€5.6 million), an indication of how much companies like Capco have benefited from the boom in the Irish building industry in recent years. After tax profits last year were £3.4 million (€4.3 million), indicating that SIG has bought the business at about ten times earnings.
Capco has little debt and the group had retained profits of £12.1 million (€15.4 million) in March 2001.
Between the Irish and British operations, Capco has more than 225 employees in 19 branches in Ireland and the UK.
SIG - formerly known as Sheffield Insulations and effectively a larger version of Capco - last year had sales of £932 million sterling (€1.485 billion) and pre-tax profits of £48 million sterling (€76.5 million). In the half-year to the end of June, SIG reported a 7 per cent increase in profits to £23 million sterling (€36.7 million).
Commenting on the Capco acquisition, SIG chief executive Mr Bill Forrester said: "Capco is a perfect fit for SIG. It consolidates our position in our principal product areas with little geographic overlap and provides us with a market leadership in Ireland.
"There is also scope to improve Capco's margins and we expect it to be earnings enhancing in the first year."
