Superglass Insulation
NBGI PE’s investment in Superglass was made in August 2005 in a deal valued at approximately £40million.
Superglass is the UKs second largest manufacturer of glass wool insulation (principally for lofts and cavity walls in domestic homes).
In July 2007 NBGI PE floated Superglass on the London Stock Exchange at an enterprise value of £135million. The exit generated a 10.7x return and an IRR of 244% p.a. for NBGI PE.
NBGI PE spotted the opportunity to invest in an operationally strong management team, in a business which was one of three manufacturers of such a product in the UK and in an industry where government requirements for improving energy efficiency was driving increased demand for Superglass products.
NBGI PE’s insight on the market opportunity helped it to outbid other private equity houses in a competitive auction in August 2005 in the sale from Encon Ltd.
The value created in less than two years was principally due to:
- a strategy to invest in increasing production capacity by 50% at relatively low cost;
- shifting production to white blowing wool for cavity wall fills to meet increased demand; and
- calling the market correctly and taking advantage of the increased institutional appetite for this type of business.
