Owens Corning announced that it has signed an agreement with CVC Capital Partners to acquire Paroc Group, a leading producer of mineral wool insulation for building and technical applications in Europe, for an enterprise value of approximately €900 million ($1.07 billion). The transaction, which is subject to regulatory approvals and other customary conditions, is anticipated to close in early 2018.

Paroc is a leading European manufacturer of high-performance mineral wool insulation solutions for a variety of end markets. Paroc manufactures building insulation for thermal, fire and acoustic applications in residential and commercial construction. The company also manufactures technical insulation for HVAC systems; industrial processes; and the marine, offshore and original equipment manufacturer industries. Mineral wool products are customarily known as stonewool in Europe.

The acquisition of Paroc expands Owens Corning’s mineral wool technology, grows its presence in the European insulation market, provides access to a variety of new end-use markets and will increase the company’s sales mix of the Insulation business outside the U.S. and Canada to 35%.

Paroc’s 2017 sales are estimated to be approximately €410 million ($476 million), with adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) margins slightly more than 20%. The transaction is expected to be immediately accretive to 2018 earnings per share, excluding transaction and integration costs. The transaction is expected to yield a run rate of operational synergies of €15 million by the end of 2019.

Owens Corning chairman and CEO Mike Thaman says, “The acquisition of Paroc delivers on Owens Corning’s strategy to provide our customers with a portfolio of insulation products that cover the full temperature spectrum in the three largest insulation markets – Europe, North America and China. Over its 80-year history, Paroc has earned a reputation for high-quality products and technical expertise. I am impressed with the Paroc team and believe they will be a great addition to Owens Corning.”

Paroc employs over 1800 people in 13 countries and operates facilities in Finland, Lithuania, Poland, Russia, and Sweden.

“I am very excited about our new opportunities with Owens Corning,” says Kari Lehtinen, CEO of Paroc. “We have built a company with a leading market position, offering attractive value propositions to our customers and employees. Owens Corning will help us to expand further in the growing Central and Western European markets, using our solid base as a platform for growth.”

The company plans to finance the acquisition through a combination of long-term debt and pre-payable bank financings.