Kingspan, an Irish insulation behemoth based in Cavan, announced it has raised €750 million via a public bond offering – the firm’s first. The bonds offer a steady interest rate of 3.5% and will be fully matured in seven years. The announcement underlines yet another milestone for Kingspan in capital market, opening up a huge capital reservoir on favourable conditions to fund its next phase of global expansion. Committed to maintaining a strong investment grade rating, the company said it’s determined to ensure robust growth.
The public debut in debt markets follows Kingspan’s ongoing involvement in the acquisitions market, where it has spent nearly €2.5 billion since 2019’s inception, as revealed by Davy Analyst Flor O’Donoghue. The company, under CEO Gene Murtagh’s leadership, recently acquired a majority stake in Nordic Waterproofing, located in Sweden. This acquisition is expected to augment the company’s yearly roofing and waterproofing revenues to roughly €1 billion.
Post acquiring an additional 26.5% shares recently, the Irish firm confirmed owning a 62.6% stake in the business. This development surfaced seven weeks post Kingspan came under fire in the report evaluating the 2017 Grenfell tower fire incident in London. Kingspan’s insulation board – Kooktherm K15, was used, unbeknownst to the company, in the refurbishment of the tower block. The company faced accusations of creating a deceitful market for its product and blatant disregard towards fire safety. Kingspan’s statement following the report’s publication admitted to some intolerable historic failings within its UK insulation wing.
Analyst at Goodbody Stockbrokers, Shane Carberry, highlighted the robust demand from bond investors for Kingspan’s inaugural issue. He stressed that this reveals the group’s quality appraisal not just by equity stakeholders, but debt stakeholders as well, thereby augmenting the group’s diversified funding methodologies.
According to Carberry, Kingspan has the potential to more than double its sales and profits by 2023, a jump from last year’s standing of €8.1 billion. He stated confidently that even with the investment needed to stimulate a hike in sales and profits during this timeline, the financial stability of the group remains secure.
As of June’s end, Kingspan’s net debt hovered slightly above €1.5 billion, equivalent to 1.5 times the earnings before interest, tax, depreciation and amortisation (Ebitda) for the previous year.