TopBuild Corp., an installer and specialty distributor of insulation and building material products, entered into an agreement to acquire Specialty Products & Insulation (SPI) in an all-cash transaction valued at $960 million. SPI is a portfolio company of Incline Equity Partners.
“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,” Robert Buck, president and CEO of TopBuild, said in a prepared statement. “SPI has a broad customer base, an experienced and talented operating team, and a fabrication footprint complementary to our current mechanical insulation business. In addition, SPI generates significant recurring revenue from industrial maintenance and repair. When combined with our Specialty Distribution business today, we estimate recurring revenue will account for approximately one-third of the segment’s overall revenue stream.”
The transaction is subject to customary closing conditions, including expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
SPI generated pro forma revenue of approximately $703 million and adjusted EBITDA of $77 million for the trailing 12 months ended March 31. Approximately 50% of SPI’s revenue is recurring and tied to maintenance and repair activity, while the other half is related to new construction activity.
“We are very pleased to announce this transaction with TopBuild. This will be a tremendous benefit for our customers as the combined organization will be even better positioned to provide them with innovation and high-quality solutions,” Ray Sears, president and CEO of SPI, said. “Both companies have similar corporate cultures with an emphasis on safety, respect, and a continued drive to improve.”
