TopBuild Corp. will purchase Specialized Products and Insulation

Date:

TopBuild Corp., an installer and specialist distributor of insulation and building material supplies to the construction industry in the United States and Canada, has agreed to buy Specialty Products & Insulation (“SPI”) for $960 million in cash. SPI is an Incline Equity Partners portfolio firm.

“The acquisition of SPI is highly strategic for TopBuild, accelerating Specialty Distribution’s growth and enhancing our leadership position in the very diverse and fragmented insulation industry,” said Robert Buck, president and chief executive officer of TopBuild. SPI has a large client base, a skilled and experienced management team, and a fabrication footprint that complements our current mechanical insulation company. Furthermore, SPI produces substantial recurring revenue from industrial maintenance and repair. We believe that recurring revenue will account for approximately one-third of the segment’s overall revenue stream when combined with our Specialty Distribution business today.”

TopBuild’s board of directors has approved the transaction, which is subject to customary closing conditions, including the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.

SPI achieved pro forma sales of about $703 million and adjusted EBITDA of $77 million for the fiscal year ended March 31, 2023. Roughly half of SPI’s revenue is recurring and is associated with maintenance and repair activity, while the other half is associated with new construction activity. TopBuild intends to fund the $960 million deal using a new $550 million Term Loan A and cash on hand. Based on March 31, 2023 pro forma results, the company’s net debt to pro forma adjusted EBITDA ratio is estimated to be around 2.0 times. TopBuild will benefit from a $90 million tax asset as a result of the purchase.

“We are very pleased to announce this transaction with TopBuild,” said Ray Sears, president and chief executive officer of SPI. This will be a huge benefit to our clients because the merged firm will be even better positioned to supply innovative and high-quality solutions. Both firms have comparable corporate cultures, with an emphasis on safety, respect, and continuous improvement.”


Amazing Builder Partners



Jack Bjorklund
Jack Bjorklund
Jack is one of our correspondents who provide mainly on building industry trend updates.

Popular

Share post:

More like this
Related

Zoom Drain Establishes a New Franchise Site in Jacksonville, Florida

Zoom Drain, a prominent provider of drain and sewer...

First Coastal Exteriors Joins Beacon

Beacon announced the completion of its acquisition of First...

Colony Hardware Acquires New South Construction Supplies

Jim Sobeck, the owner of New South Construction Supply...

Accoya USA sets ground on a new facility in Tennessee

Accoya USA LLC started work on its US production...

Kodiak Building Partners acquires Don’s Appliances

Kodiak Building Partners, a distributor of building materials and...

D.R. Horton’s Siding is Now Supplied by James Hardie

The largest fiber cement home siding company in North...

Tractor Supply Company Collaborates with Miranda Lambert’s MuttNation Foundation

Tractor Supply Company and Miranda Lambert's MuttNation Foundation, the...

Boise Cascade expands its distribution network in two additional markets.

The Building Materials Distribution branch of Boise Cascade has...

East Texas Hardware Acquired by Nation’s Best

East Texas Hardware has been added to Nation's Best's...

Better Doors and Windows has Joined Forces with Compose Build

Better Doors and Windows, a door and window manufacturing...

Inflation Remains High as Housing Costs Continue to Rise

Despite a slowing in year-over-year growth, shelter costs continue...

RoyOMartin invests $9.5M to modernize manufacturing facility in Louisiana

Martco, LLC, the parent company of RoyOMartin, a third-generation,...

Diversified Manufacturing of California Acquired by NASL

Diversified Manufacturing of California (DMOC) dba Profile Wrapping, a...

JELD-WEN One of Newsweek’s Most Trustworthy Companies for 2023

For the second year in a row, JELD-WEN Holding,...

Beacon Opens New Location in West Bend, Wisconsin

Beacon has launched a new branch in West Bend,...

According to Realtors, The Most Crucial Factor Limiting Purchases is a Lack of Housing Inventory

According to a National Association of Realtors poll, nearly...