Installed Building Products Announces the Acquisition of Thrice Energy Solutions, LLC, Gutter Pro Enterprises, Inc., and a Share Repurchase Update

Rhea-AI Summary

Installed Building Products (IBP) has announced the acquisition of Thrice Energy Solutions and Gutter Pro Enterprises. Thrice, based in Oklahoma City, specializes in installing fiberglass and spray foam insulation in both residential and commercial markets across Oklahoma and Texas. Gutter Pro, located in Plymouth, Massachusetts, serves residential and commercial clients in Massachusetts and Rhode Island. These acquisitions collectively add approximately $14 million in annual revenue and expand IBP's geographic and product diversity. Additionally, IBP repurchased roughly 215,000 shares of its common stock for $46 million in June, leaving over $250 million available in its repurchase program as of June 17, 2024.

Positive

• Acquisitions add $14 million in annual revenue.
• Thrice expands IBP's presence to Oklahoma and Texas.
• Gutter Pro strengthens IBP's position in the Northeast.
• IBP's growth strategy includes a robust pipeline of acquisition opportunities.
• Repurchased 215,000 shares for $46 million, enhancing shareholder value.
• Over $250 million remains in IBP's stock repurchase program.

Negative

• Significant expenditure of $46 million on share repurchase could impact liquidity.
• Integration risks associated with newly acquired companies.
• Potential market saturation in existing regions.

Financial Analyst

The acquisition of Thrice Energy Solutions, LLC and Gutter Pro Enterprises, Inc. adds approximately $14 million of annual revenue to Installed Building Products (IBP). While the revenue addition is modest, it represents a strategic move to diversify and expand IBP’s market presence in new geographical regions. The acquisition of Thrice introduces IBP to Oklahoma City, a significant new construction market, which may present substantial growth opportunities in both residential and commercial sectors.

Additionally, Gutter Pro reinforces IBP’s footprint in the Northeast region, a market where the company may already have a solid base. Diversifying geographically can mitigate risks associated with regional economic downturns, providing a more stable revenue stream. The $46 million repurchase of common stock in June indicates strong confidence from the company in its own financial health, potentially signaling to investors that IBP believes its stock is undervalued. Such buybacks can lead to a higher stock price as they reduce the number of shares outstanding.

However, investors should keep an eye on the integration process of these acquisitions and any associated costs that could impact short-term profitability. Another aspect to consider is the robust pipeline of acquisition opportunities mentioned by the CEO, which may suggest further growth, but also the potential for increased debt or dilution if funded through equity issuance.

Market Research Analyst

The acquisitions of Thrice Energy Solutions and Gutter Pro Enterprises highlight IBP’s strategic intent to bolster its product portfolio and regional market coverage. Entering Oklahoma City, a burgeoning market for new constructions, through Thrice could provide IBP with a competitive edge. Spray foam and fiberglass insulation are standard in both residential and commercial builds, potentially driving sustained demand.

Gutter Pro's acquisition in the Northeast enhances IBP's service offerings in a densely populated area, where the demand for gutter installation can be robust due to diverse weather conditions. By expanding in different regions with distinct climatic needs, IBP can create a broader, more balanced portfolio, minimizing risk exposure to localized economic fluctuations.

Despite these positive aspects, investors should consider the competitive landscape in these regions. Both Oklahoma and the Northeast have established local and national players. The key will be how well IBP integrates these new acquisitions to leverage cross-selling opportunities and economies of scale effectively. The company’s history of successful acquisitions could be a positive indicator, but each new market presents unique challenges.

Legal Expert

From a legal perspective, the acquisitions of Thrice Energy Solutions and Gutter Pro Enterprises appear to be straightforward expansions. However, due diligence is important in these transactions to ensure smooth integration and mitigate potential legal risks. This includes verifying that the acquired companies comply with all local and federal regulations, particularly environmental and labor laws, given their operations in insulation and construction-related services.

The share repurchase indicates solid confidence from IBP in its own market valuation. Legally, executing such a significant buyback requires thorough compliance with SEC regulations to avoid market manipulation accusations. It also reflects the company's commitment to returning capital to shareholders, which could enhance shareholder value in the longer term.

Investors should monitor for any legal challenges that might arise from these acquisitions, especially in the integration phase. Proper handling of these new acquisitions' liabilities and ensuring seamless operational handover will be critical to maintaining IBP’s stability and reputation.

Two Acquisitions Add Approximately $14 Million of Annual Revenue

IBP Repurchased $46 million of Common Stock in June Under Its Existing Repurchase Program

COLUMBUS, Ohio--(BUSINESS WIRE)-- Installed Building Products, Inc. (the “Company” or “IBP”) (NYSE: IBP), an industry-leading installer of insulation and complementary building products, today announced the acquisition of Thrice Energy Solutions, LLC (“Thrice”). Located in Oklahoma City, Oklahoma, Thrice has a new residential and commercial end market presence throughout Oklahoma and Texas primarily installing fiberglass and spray foam insulation.

On June 3, IBP completed the acquisition of Gutter Pro Enterprises, Inc. (“Gutter Pro”), a gutter installer based in Plymouth, Massachusetts. Gutter Pro services both residential and commercial customers throughout Massachusetts and Rhode Island.

"The Thrice and Gutter Pro acquisitions represent combined annual revenue of nearly $14 million and reflect our continued effort to expand into new geographic regions while diversifying our installed product offering. Thrice will be our first branch in Oklahoma City, one of Oklahoma's largest new construction markets, while Gutter Pro reinforces our presence in the Northeast region,” stated Jeff Edwards, Chairman and Chief Executive Officer. “Acquisitions remain a key component of our growth strategy and we continue to have a robust pipeline of opportunities across multiple geographies, products, and end markets. On behalf of everyone at Installed Building Products, I want to welcome Thrice and Gutter Pro onto our team.”

During the month of June, IBP repurchased approximately 215 thousand shares of its common stock at a total cost of $46 million, including commissions. At June 17, 2024, the Company has over $250 million available under its stock repurchase program.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the federal securities laws, including with respect to the housing market and the commercial market, our operations, industry and economic conditions, our financial and business model, the demand for our services and product offerings, expansion of our national footprint and end markets, diversification of our products, our ability to grow and strengthen our market position, our ability to pursue and integrate value-enhancing acquisitions and the expected amount of acquired revenue, our ability to improve sales and profitability, and expectations for demand for our services and our earnings. Forward-looking statements may generally be identified by the use of words such as "anticipate," "believe," "expect," "intends," "plan," and "will" or, in each case, their negative, or other variations or comparable terminology. These forward-looking statements include all matters that are not historical facts. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that may or may not occur in the future. Any forward-looking statements that we make herein and in any future reports and statements are not guarantees of future performance, and actual results may differ materially from those expressed in or suggested by such forward-looking statements as a result of various factors, including, without limitation, general economic and industry conditions; increases in mortgage interest rates and rising home prices; inflation and interest rates; the material price and supply environment; the timing of increases in our selling prices; and the factors discussed in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, as the same may be updated from time to time in our subsequent filings with the Securities and Exchange Commission. In addition, the timing and amount of any repurchases under the stock repurchase program is determined by the Company’s management at its discretion based on a variety of factors, including the market price of our common stock, corporate considerations, general market and economic conditions, and legal requirements. The program may be modified, discontinued or suspended at any time. Any forward-looking statement made by the Company in this press release speaks only as of the date hereof. New risks and uncertainties arise from time to time, and it is impossible for the Company to predict these events or how they may affect it. The Company has no obligation, and does not intend, to update any forward-looking statements after the date hereof, except as required by federal securities laws.

About Installed Building Products

Installed Building Products, Inc. is one of the nation's largest new residential insulation installers and is a diversified installer of complementary building products, including waterproofing, fire-stopping, fireproofing, garage doors, rain gutters, window blinds, shower doors, closet shelving and mirrors and other products for residential and commercial builders located in the continental United States. The Company manages all aspects of the installation process for its customers, from direct purchase and receipt of materials from national manufacturers to its timely supply of materials to job sites and quality installation. The Company offers its portfolio of services for new and existing single-family and multi-family residential and commercial building projects in all 48 continental states and the District of Columbia from its national network of over 250 branch locations.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240617832319/en/

Investor Relations:

614-221-9944

investorrelations@installed.net

Source: Installed Building Products, Inc.

FAQ

What companies did IBP acquire?

Installed Building Products acquired Thrice Energy Solutions and Gutter Pro Enterprises.

What is the annual revenue addition from IBP's recent acquisitions?

The acquisitions add approximately $14 million in annual revenue.

Where is Thrice Energy Solutions based?

Thrice Energy Solutions is based in Oklahoma City, Oklahoma.

What products does Thrice Energy Solutions install?

Thrice Energy Solutions installs fiberglass and spray foam insulation.

Where does Gutter Pro Enterprises operate?

Gutter Pro Enterprises operates in Massachusetts and Rhode Island.

How many shares did IBP repurchase in June?

IBP repurchased approximately 215,000 shares in June.

What was the total cost of IBP's share repurchase in June?

The total cost of the share repurchase was $46 million.

How much is left in IBP's stock repurchase program?

IBP has over $250 million available under its stock repurchase program.