TopBuild Scraps $1B SPI Acquisition Amid Antitrust Scrutiny
Mutual termination follows Department of Justice concerns over reduced competition in the building insulation market.
TopBuild (NYSE: BLD) has mutually terminated its proposed $1 billion acquisition of Specialty Products and Insulation (SPI), a significant reversal that comes after months of scrutiny from the U.S. Department of Justice over antitrust concerns.
The deal, first announced in late 2023, was intended to create a powerhouse in the specialty insulation distribution sector. However, the DOJ raised alarms that the merger of two of the largest players would stifle competition. According to , the combination would have eliminated fierce head-to-head competition, potentially leading to higher prices and lower quality service in the building insulation products market.
When the acquisition was initially announced, TopBuild hailed the move as a highly strategic transaction that would accelerate the growth of its Specialty Distribution segment. In the , TopBuild President and CEO Robert Buck highlighted SPI's complementary footprint and experienced team as key drivers for the deal, which was expected to be immediately accretive to earnings per share.
The strategic rationale focused on expanding TopBuild's geographic reach and fabrication capabilities, particularly in the commercial and industrial markets, thereby strengthening its non-cyclical revenue streams. The combination was projected to increase the recurring revenue portion of TopBuild's Specialty Distribution business to approximately one-third of its total sales.
Despite efforts to find a solution, the companies were unable to agree on terms that would both satisfy regulatory requirements and deliver value to shareholders. In a press release announcing the termination, TopBuild confirmed it paid a to SPI. Despite the setback, the company has signaled its intent to remain an active acquirer, citing a strong balance sheet and a robust pipeline of M&A opportunities to continue its growth strategy.