£38m sale of building division falls through
Sheffield-headquartered building materials specialist SIG is cancelling its proposed £37.5m sell off of its Building Solutions Division to Ireland-based Kingspan Group.
As reported last month, the deal had been referred to the UK Competition & Markets Authority (CMA), due to concerns that it could harm competition.
The CMA referred the intended disposal for a Phase two investigation on 21 April 2020, following the outcome of its Phase one decision on 7 April 2020.
In an update this morning, SIG has stated: “The sale and purchase agreement regarding the disposal expires on 7 July 2020.
“It is anticipated the CMA’s Phase two investigation would conclude in October 2020 and accordingly the date in the agreement would need to be extended in order for the Phase two investigation to be carried out.
“As a result of the prevailing market conditions, it has not been possible for the company and Kingspan to agree commercial terms for the extension of the agreement.
“Accordingly, the parties have agreed to terminate the agreement with immediate effect and the disposal therefore will not proceed.
“The company is currently reviewing a number of options regarding the Building Solutions business and will provide further updates when appropriate.”
The Building Solutions sale to Kingspan Group had originally been intended to help reduce the company’s financial indebtedness.
Building Solutions is a manufacturer and distributor of building envelope solutions operating through brands which include Steadmans, United Roofing Products, Trimform Products, and Advanced Cladding & Insulation.
In the year ended 31 December 2018, the business reported revenue of £60m, operating profit of £3.3m and operating cash flow of £5m, with gross assets of £28.8m.
Kingspan, which is based in Ireland, is a major UK provider of standard foam sandwich panels, which are commonly used as insulated cladding on commercial and industrial buildings such as large waste facilities.