TopBuild to acquire SPI in all-cash transaction valued at $960M

TopBuild has 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. TopBuild plans to fund this $960 million transaction with a new $550 million Term Loan A and cash on hand. The Company’s net debt to pro forma adjusted EBITDA is expected to be approximately 2.0 times, based on March 31, 2023, trailing twelve months pro forma results. As a result of the transaction, TopBuild will benefit from a $90 million tax asset. Robert Buck, President and Chief Executive Officer of TopBuild, stated, “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. 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.”