Kingspan Set to Complete Acquisition of Nordic Waterproofing in £44m Buyout

THE DIRECTORS of Nordic Waterproofing Holding AB is unanimously recommending shareholders accept the £44m cash buyout offer by Kingspan Holdings (IRL) Ltd today.

Kingspan is already Nordic Waterproofing’s main shareholder and submitted its offer to buy all shares in Nordic Waterproofing for £13.30 in cash per share (SEK 182.50).

Ireland-headquartered Kingspan already owns 21,042,883 shares in Nordic Waterproofing around 87.3% of the total.

Nordic Waterproofing is a major provider of waterproofing in northern Europe and owns installer subsidiaries in Scandinavia.

Kingspan Set to Complete Acquisition of Nordic Waterproofing

The Kingspan offer values the total number of shares in Nordic Waterproofing to approximately £320m (SEK 4,395m). The total value of the offer, based on the 3,041,052 shares in Nordic Waterproofing, which are not owned by Kingspan, amounts to approximately £44m (SEK 555m) and is made without conditions.

Kingspan’s offer price represents a premium of 7% on shares compared to their closing price on the Nasdaq Stockholm stock market yesterday and a 3.2% premium on the average share price during the last 30 days of trading.

Under Swedish takeover rules there is now a four week ‘acceptance period’ where Nordic Waterproofing’s board of directors must make public an independent expert valuation of the company’s shares.

Kingspan expects to publish an offer document tomorrow and the offer to be accepted on 6 March 2025.

Impact on the Company and its Employees

The takeover rules also require Nordic’s board to present its opinion of the impact on the company, particularly on employment and on the locations where it operates, as well as Kingspan’s strategic plans for Nordic Waterproofing.

Kingspan says it “places great value on Nordic Waterproofing’s management and employees. There are currently no intentions, and no decisions have been made, on any changes or strategical plans that may impact Nordic Waterproofing’s employees and management, including their terms of employment, Nordic Waterproofing’s organisation or operational sites. The offer is also not expected to result in any material changes for Kingspan’s management, employees, organisation, or operational sites.”

The Nordic Waterproofing board says it “assumes that this description is accurate and has for relevant purposes no reason to adopt a different opinion”.

Nordic Waterproofing Decision

In assessing Kingspan’s offer, the Nordic board says it has looked at the market share price of Nordic Waterproofing, the company’s strategic options and prevailing market conditions, as well as expected future developments.

It says it has “full confidence” in management to execute Nordic Waterproofing’s current strategy and achieve the company’s financial goals, but, it says, there are risks.

Weighed against this, Nordic’s board says it can see opportunities and benefits of having Kingspan as an owner by being part of an international group, allowing greater global reach with Kingspan’s distribution network and customer base. Other benefits of Kingspan ownership include operational ‘synergies’ and an ability to scale up with immediate access to capital.

While Nordic admits the premium valuation of shares, it says it must take into account that Kingspan, since September 2023, has acquired more than half of shares in Nordic Waterproofing. This boosted the company’s share price, which Kingspan’s offer price is now being compared against.

Before Kingspan increased its shareholding in Nordic and announcement in October 2023 that a public offer would follow, the share price was lower.

Since the offer by Kingspan in October 2023, Nordic has sought other potential bidders but considers the likelihood of a better offer low.

Risks to Existing Shareholders

Regardless of the Kingspan’s buyout success or otherwise, it will, through its existing holdings in Nordic Waterproofing, have a dominating influence over the company, Nordic adds. It points out that a dominant main owner’s interests may differ significantly from, or compete with, the interests of other shareholders.

Furthermore, the Nordic board says the liquidity of the company’s shares may be limited because Kingspan already owns such a large percentage, hampering their trading value and ultimately, risking delisting from Nasdaq Stockholm.

The risk is not without basis, as the Nordic board points out. It explains that, if Kingspan acquires more than 90% of shares, it has announced that it intends to start compulsory ‘redemption proceedings’ to acquire all remaining Nordic shares and to promote delisting from Nasdaq Stockholm. A compulsory redemption process would mean that all shareholders, regardless of whether they tender their shares in the buyout or not, will have their shares forcibly sold.

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