Romanian construction materials manufacturer TeraPlast Group has agreed to sell its steel division to Ireland-based competitor, Kingspan Group PLC, according to a press release to the Bucharest Stock Exchange on July 27.
Upon clearance of the deal, Kingspan should acquire the parent company’s (TeraPlast SA) entire shareholding in subsidiaries TeraSteel, TeraSteel Serbia and Wetterbest for around €85mn ($99.8mn), which is subject to change based on the value of net debt and working capital.
TeraSteel produces insulating panels, zinc coated profiles and structural steels, corrugated sheets, and turnkey halls. The company is marketed as a leader in the Romanian sandwich steel panels industry, while TeraSteel Serbia is one of the top exporters in central and eastern Europe.
The transaction is likely to bolster Kingspan’s insulated panels business, which has grown to represent 64pc of the company’s product portfolio, following the acquisition of Joris Ide in 2015, Euroclad and Paroc in 2016, according to the company’s website.
The deal could be viewed as not only horizontal integration into eastern European markets to complement its existing western European operations, but also vertical integration with a supplier of raw materials for its finished products.