TopBuild Buys SPI in $1 Billion Deal, Expanding Its Grip on the Insulation Industry
TopBuild Corp., a leading player in the insulation and commercial roofing business, has just made one of its biggest moves yet—acquiring Specialty Products and Insulation (SPI) in an all-cash deal worth $1 billion. The acquisition significantly strengthens TopBuild’s position in commercial and industrial markets, expands its geographic footprint, and bolsters its mechanical insulation fabrication capabilities.
The deal, which closed on October 7, marks a major step in TopBuild’s growth strategy, bringing in a company that generated $700 million in revenue and $75 million in EBITDA over the last twelve months.
Let’s break down what this means for TopBuild, the broader construction and insulation industry, and what investors should keep an eye on next.
What Does SPI Bring to the Table?
SPI is no small player. Headquartered in Charlotte, North Carolina, SPI operates 90 branches and employs around 1,000 people across North America. It’s known for being a top distributor and fabricator of mechanical insulation solutions, serving commercial, industrial, and residential markets.
But what really makes SPI attractive to TopBuild is the nature of its revenue. Around 55% of SPI’s business is tied to recurring maintenance and repair work, making it less dependent on the economic cycle—a key advantage in a volatile market.
Strategic Benefits for TopBuild
1. Stronger Market Position in Specialty Distribution
By adding SPI’s capabilities, TopBuild solidifies its leadership in the specialty distribution space. The two companies have complementary strengths, especially in commercial and industrial insulation, where 87% of SPI’s revenue is generated.
2. Expanded Fabrication and Geographic Reach
SPI brings expanded mechanical insulation fabrication capabilities to TopBuild, something the company sees as vital for long-term growth. It also extends TopBuild’s reach across North America, giving it greater national scale in a fragmented industry.
3. More Stable, Recurring Revenue
In uncertain times, recurring revenue is gold. With SPI, TopBuild is increasing its exposure to non-cyclical markets, making the business more resilient during economic downturns.
Financials: Is the Deal Worth It?
- Purchase Price: $1 billion in cash
- SPI Revenue (TTM as of June 2025): $700 million
- SPI EBITDA: $75 million
- EBITDA multiple (pre-synergies): 12.4x
- EBITDA multiple (post-synergies): 8.3x
- Annual cost synergies expected: $35–$40 million within two years
- Immediate EPS accretion: Yes
Even before accounting for cost synergies, the deal looks like a bold but calculated bet. With synergies factored in, the multiple drops to a much more attractive 8.3x, signaling strong return potential.
TopBuild funded the transaction with cash on hand, including proceeds from a $750 million senior notes issuance in September 2025.
Leadership Weighs In
Robert Buck, TopBuild’s CEO, said the SPI acquisition is “highly strategic,” praising SPI’s fabrication capabilities and recurring revenue base. “This transaction enhances our value proposition and strengthens our presence across North America,” Buck said.
Meanwhile, Ray Sears, CEO of SPI, expressed confidence in the deal, highlighting shared values between the two companies. “TopBuild is the best strategic owner for our business,” Sears noted. “Together, we’ll be better positioned to serve customers with innovative, high-quality solutions.”
Bigger Picture: TopBuild’s M&A Machine
TopBuild has a strong track record in mergers and acquisitions, completing 45 acquisitions since its 2015 spin-off. The company has delivered a return on invested capital (ROIC) of 18.2% as of the end of 2024.
This SPI deal isn’t just a one-off—it’s part of a larger strategy that’s driving TopBuild’s evolution from an installer into a dominant distribution force across North America.
What Should Investors Watch Next?
1. Synergy Execution
Realizing $35–$40 million in annual cost savings will be crucial to justify the acquisition multiple. Expect updates on integration progress in upcoming earnings calls.
2. Impact on EPS
With the acquisition being immediately accretive to earnings per share, look for signs of bottom-line improvement in future quarters.
3. Debt Leverage
The acquisition was funded partly with debt. TopBuild’s pro forma net debt stands at $2.9 billion, resulting in a net leverage ratio of 2.4x—a manageable number but something to monitor if more deals follow.
4. Future Acquisitions
TopBuild isn’t likely done yet. With a proven M&A model and an appetite for growth, additional bolt-on acquisitions could be coming.
Final Thoughts
TopBuild’s $1 billion acquisition of SPI is more than just a headline—it’s a strategic move to reshape its business for long-term resilience and growth. The deal strengthens TopBuild’s foothold in the commercial and industrial insulation market, boosts its recurring revenue mix, and signals confidence in the company’s M&A strategy.
As market demand shifts and construction cycles fluctuate, TopBuild is positioning itself as a leader not just in insulation installation, but in specialty distribution and fabrication, where consistency and scale will be key competitive advantages.
If TopBuild can execute on its synergy targets and continue to grow its market share, this deal could mark a turning point in the company’s journey toward industry dominance.