ON TRACK FOR GROWTH

Kingspan acquires majority stake in Steico SE, Associated Hardware and National Hardware announce merger and Utility Innovation Group establishes European HQ in Dublin

PCRE to build 230MW of solar assets in Ireland
Power Capital Renewable Energy, one of Ireland’s leading solar Independent Power Producer (IPP), has announced the closing of two greenfield project finance transactions with a club of lenders composed of Allied Irish Bank (AIB) and La Banque Postale (LBP), for an aggregate commitment of €125,000,000 in bank facilities. Proceeds from the first of the agreed financing packages will be used to fund a portfolio of solar projects across counties Cork, Louth and Meath with an aggregate capacity of 150MW and supported by long-term Power Purchase Agreements (PPAs) with Microsoft. The facilities from the second financing will go towards the construction of a single solar farm of 85MW located in county Wexford, which benefits from a long-term PPA with another undisclosed technology company. All projects are already under construction and are expected to be commissioned over the next nine months. Power Capital was successfully awarded a 15-year subsidy support for 300 MW of solar projects in the 2022 Renewable Energy Support Scheme (RESS-2) auction. Power Capital is currently working on deploying a solar and battery storage pipeline of 5GW in Ireland.

In January 2023, Power Capital secured €240,000,000 of construction equity facilities from a consortium of lenders managed by Eiffel Investment Group including Belgian insurance company Ethias and the European Investment Bank, which demonstrated the confidence that leading private and public lenders have in Power Capital’s strategy and capabilities. The facilities will support the IPP’s growth, at home and abroad. Power Capital has also made advances in the US, recently acquiring a development platform “Hawthorne Renewables”. This marks a significant milestone for the IPP as its first investment outside of the Irish market. The Phoenix-based team boasts a pipeline of 5GW of solar and storage across three US markets in New Mexico, Oregon and Washington.

Kingspan acquires majority stake in Steico SE
Kingspan Group plc has announced it has entered into an agreement with Schramek GmbH to acquire c.51% of the shares of Steico SE, with an option to acquire a further c.10% of shares in Steico in the future. Steico is the world leader in natural insulation and wood-based building envelope products, based in Germany and listed on the unofficial markets of several German Stock Exchanges. As at June 2023, Steico guided 2023 revenues of c. €378 million at an EBIT margin of 8% – 10% (FY22 14.6%). As at 31 December 2022, Steico had gross assets of €509 million. The initial consideration for the shares will be €35 per share, plus potential deferred consideration of up to a further €35 per share contingent on achievement of specified thresholds with a material uplift in profitability. The initial consideration of approximately €251.4m will be satisfied on completion, with 25% of the consideration potentially being exchanged for new shares in Kingspan (subject to Kingspan share price at completion). The acquisition is expected to be earnings neutral initially, based on Kingspan consensus EPS for 2023 and Steico guidance for 2023. In addition to Steico’s existing ambitious growth plans Kingspan anticipate significant long term leverage via the Kingspan sales channels. The existing Steico executive management team will be retained in the business and will continue to manage and develop the business. Upon closing, Kingspan will seek fair representation on Steico’s administrative board. Gene Murtagh, Kingspan Chief Executive Officer, said: “The acquisition of a majority stake in Steico represents an exciting next step in our strategy to provide the full spectrum of insulation products. Its suite of wood-based building envelope solutions broadens our ability to enable our customers to meet their sustainability and energy performance needs. Kingspan’s global routes to market, paired with our drive to innovate and widen the applications of Steico’s current technologies, are key to our plans to bring Steico bio-based solutions to the next level.”

Associated Hardware and National Hardware merge
Associated Hardware and National Hardware, two of Ireland’s leading hardware groups, have completed a long term merger process, switching over to a single entity trading under the United Hardware company name, which served as the name for the joint venture between both companies since 2009. The previous joint venture between these companies was established in response to an existential threat to the building supplies industry following the impact of the property crash in 2009, which decimated the construction sector.

United Hardware will continue to be led by its current Chief Executive Officer and President of the Hardware Association of Ireland, Paul Candon. It will now operate as a true cooperative business with the sole focus of delivering maximum value to its 115 equal shareholding members. Members will benefit more from the new cooperative structure with the majority of profits being returned to members through rebates and loyalty bonuses. Remaining profits will be reinvested into the Group to facilitate future growth and development.

The merger is expected to deliver significant operational, commercial and financial benefits to the now combined Group, along with its members too. It will also enable the Group to invest significantly in its Homevalue retail brand, which it plans to position as a truly national brand that is recognisable to every tradesperson and homeowner in the country. Commenting on the completion of the merger transaction, Paul Candon, United Hardware’s Chief Executive Officer, said: “United Hardware has outperformed the market in recent years however there is still significant unrealised potential for the business and its members. We are now on an accelerated journey to realising this full potential by leveraging the many benefits that our merger presents. Through all of this, we will consolidate our positioning as the market’s largest Co-operative group, but more importantly, the most attractive partner to the independent DIY and builders merchants, suppliers and the wider construction sector in Ireland.” United Hardware is now planning to pursue an ambitious growth programme focused on organic sales growth at store level, network growth and investment in digital and branding. The merger means United Hardware will now have total revenues in excess of €300 million.

Utility Innovation Group establishes European HQ in Dublin
Utility Innovation Group (UIG), a US-based provider of advanced energy solutions, has announced the strategic acquisition of Enicity, an advisory firm specialising in the application of innovative energy technologies in modern power systems based in Ireland. Following the minority investment by Gothenburg, Sweden based Volvo Penta in April, the acquisition will see UIG establish a formal European headquarters in Dublin as it positions itself for accelerated expansion into the wider European energy market.

The global journey towards decarbonisation is presenting new and complex challenges for electric utilities and Large Energy Users (LEUs), including data centres, in all major economies. As people strive to reduce their carbon footprint and transition to cleaner more diverse energy sources, electric utilities and operators are under increasing pressure to optimise their infrastructure and integrate renewable energy into their grids all while ensuring reliable power supply which minimises environmental impact. Founded by Alan McHugh, Enicity has established itself as an influential player across the European energy sector, known for its partnership approach and commitment to smart and sustainable energy solutions for utilities and LEUs. By incorporating Enicity’s regulatory experience, utility facing capability and established network, UIG further compliments its wealth of system integration expertise as they deploy their battery energy storage, distributed generation, and GridSure controls platform within the European market.

Alan McHugh will continue onwards as Managing Director of Europe for UIG. The acquisition aligns with UIG’s mission to revolutionise the global energy landscape and underscores its commitment to influencing the growth of decentralized and advanced utility systems worldwide. Alan McHugh, Managing Director, Enicity said: “We are delighted to become part of the Utility Innovation Group family. This partnership marks an exciting new chapter, as we combine our expertise with UIG’s vast resources, solutions platform, and global reach. Together, we are poised to bring unparalleled innovation to the European energy market and drive the adoption of sustainable energy solutions at scale.”

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Michael McDonnell Managing Editor of Irish Construction Industry Magazine & Plan Magazine

Email: michael@irishconstruction.com      WWW.MCDMEDIA.IE