Kingspan to acquire Meath data centre provider in €900M deal

Cavan headquartered building materials group Kingspan is set to acquire Meath-based data centre infrastructure provider BMC Manufacturing in a deal valued at up to €900M.

Kingspan will pay an initial €850m for 100% of Ashbourne-based BMC Manufacturing, with the consideration comprising €600M in cash and €250M through the issue of new Kingspan shares.

A further €50M could be paid if BMC meets certain profit targets.

BMC, which employs more than 350 people, designs, engineers and manufactures low-voltage switchgear and critical power management systems for the data centre industry. The company supplies customers across the US, Europe, the Middle East, Africa and Asia-Pacific, and operates from four facilities here in Ireland.

BMC is forecast to generate revenue of approximately €280M this year, with earnings before interest, tax, depreciation and amortisation (EBITDA) expected to reach around €90M.

The acquisition is expected to be completed in the last quarter of this year, subject to regulatory approval.

The €600M cash element will be funded from Kingspan's existing credit facilities.

BMC's management team will remain, and Kingspan say the acquisition, seen as highly complementary to its existing Advnsys data infrastructure business, forms part of their strategy to develop fully integrated data centre solutions spanning power, cooling and containment.

“We are delighted to announce this acquisition as part of our stated strategy to evolve our data offering towards fully converged power, cooling and containment solutions,” said Kingspan chief executive Gene Murtagh.

“BMC Manufacturing's advanced technology, combined with Advnsys' deep partnerships with multiple hyper-scalers, will mean that we are well-positioned to meet the accelerating global data centre demand.”

BMC founder and chairman Brendan Meehan said the deal represented a new chapter for the company and would provide a platform to accelerate its global growth.

The BMC transaction follows Kingspan's acquisition of a majority stake in Argentine insulated panel manufacturer Grupo LTN earlier, and comes as the business experiences strong momentum in its half-year results earlier this month.

Reporting an eight per cent increase in revenue to €4.86bn and a nine per cent rise in EBITDA to €626M for the six months to the end of June, Kingspan recently raised its full-year trading profit forecast by about 18% to €1.125bn, saying it expects annual revenue to exceed €10bn for the first time.

The group had also paused a previously announced €650M share buyback programme, saying it wanted to preserve financial capacity to assess further potential investment opportunities.