DAYTONA BEACH, Fla. - TopBuild Corp. (NYSE:BLD), a leader in the installation and distribution of insulation and building materials, announced its plan to acquire Metro (TSX:MRU) Supply Company, a prominent distributor of mechanical insulation in the New York/New Jersey and Baltimore/Washington metropolitan areas. The acquisition, which is anticipated to close in the fourth quarter, is expected to add approximately $35 million in annual revenue to TopBuild's operations.
Metro Supply Company operates two branches and is recognized for its strong customer relationships and high-quality product offerings. The acquisition is seen as a strategic move by TopBuild to enhance its commercial and industrial service capabilities and to expand its Specialty Distribution offerings.
Robert Buck, President and CEO of TopBuild, expressed satisfaction with the agreement, noting that it aligns with the company's commitment to growth and increasing shareholder returns. "We are pleased to further extend our ability to serve commercial and industrial customers through the acquisition of Metro Supply," Buck stated.
Charlie Lisa Jr., President of Metro Supply Company, also remarked on the acquisition's potential to grow their mechanical and acoustical insulation portfolio while maintaining their commitment to local operations and customer service.
TopBuild, headquartered in Daytona Beach, Florida, serves the construction industry in the United States and Canada through approximately 240 branches in its Installation segment and around 170 branches in its Specialty Distribution business. The company's acquisition of Metro Supply is in line with its strategy of focusing on core competencies and disciplined growth.
The press release issued by TopBuild includes forward-looking statements as defined by the Private Securities Litigation Reform Act, and the company has indicated that actual results may differ due to various risks and uncertainties.
This news is based on a press release statement and does not include any promotional content or endorsements. The acquisition details are subject to the completion of the transaction as planned and the fulfillment of customary closing conditions.
In other recent news, TopBuild Corp. reported record Q3 sales of $1.37 billion, marking a 3.6% increase year-over-year, and an adjusted EBITDA of $285.1 million, a margin of 20.8%. These figures were bolstered by seven acquisitions in 2024 that contributed approximately $118 million in annual revenue. DA Davidson, despite adjusting TopBuild's price target to $450 from $460, maintained a Buy rating, acknowledging the company's performance and future prospects. The firm noted pressures that led to a slight decrease in full-year sales and EBITDA guidance, including fluctuating spray foam pricing and variability in housing activity. However, DA Davidson remains optimistic about TopBuild's potential for growth, especially in the single-family market, and expects the company's active mergers and acquisitions pipeline to positively impact its performance. These are all recent developments in the company's operations.
InvestingPro Insights
TopBuild Corp.'s acquisition of Metro Supply Company aligns well with its growth strategy and financial position. According to InvestingPro data, TopBuild boasts a robust market capitalization of $10.34 billion, indicating its significant presence in the industry. The company's revenue for the last twelve months as of Q3 2023 stood at $5.3 billion, with a modest growth of 2.52% over the same period.
An InvestingPro Tip reveals that TopBuild's management has been aggressively buying back shares, which often signals confidence in the company's future prospects and can potentially boost shareholder value. This strategy complements the company's expansion efforts through acquisitions like Metro Supply.
Another relevant InvestingPro Tip highlights that TopBuild operates with a moderate level of debt. This financial prudence could provide the company with flexibility for future acquisitions and growth initiatives, supporting its strategy of disciplined expansion in core competencies.
It's worth noting that TopBuild's P/E ratio stands at 17.62, which is relatively high compared to its near-term earnings growth. This valuation metric suggests that investors may be pricing in future growth expectations, possibly including the potential impact of acquisitions like Metro Supply.
For readers interested in a more comprehensive analysis, InvestingPro offers 12 additional tips for TopBuild, providing a deeper understanding of the company's financial health and market position.
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