Kingspan To Buy Major Stake In Germany's Steico SE For Initial Payment Of EUR 251.4 Mln
Kingspan Group Plc (KGP.L, KGSPY), an Irish building materials company, announced Tuesday an agreement with Schramek GmbH to acquire around 51 percent stake in Steico SE for an initial consideration of around 251.4 million euros. The company will also have an option to acquire a further around 10 percent of shares in Steico in the future.
Steico is a German manufacturer of natural insulation and wood-based building envelope products.
The acquisition is expected to be earnings neutral initially, based on Kingspan consensus earnings per share for 2023 and Steico guidance for 2023.
The deal is expected to complete in early 2024, conditional on regulatory clearance. Following completion, Steico will continue to maintain its listings on the German Stock Exchanges.
The initial consideration for the shares will be 35 euros per share, plus potential deferred consideration of up to a further 35 euros per share contingent on achievement of specified thresholds with a material uplift in profitability.
The company noted that 25 percent of the consideration will be potentially exchanged for new shares in Kingspan. The consideration payable under the put and call option to acquire Schramek’s remaining around 10 percent in Steico is for a capped amount based on a multiple of future earnings.
Steico in 2022 generated operating revenues of 445 million euros, and EBITDA of 90 million euros.
As at June 2023, Steico guided 2023 revenues of around 378 million euros at an EBIT margin of 8 percent – 10 percent, compared to last year’s 14.6 percent. As at 31 December 2022, Steico had gross assets of 509 million euros.
Following the deal closure, the existing Steico executive management team will continue to manage and develop the business. Kingspan will also seek fair representation on Steico’s administrative board.
In London, Kingspan shares were trading at 71.20 euros, up 2.96 percent.
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