Installed Building Products, Inc. IBP has acquired two branches in North Charleston and Pooler from Energy One America, LLC to expand its presence in South Carolina as well as Georgia.
The two branches will operate as Charleston Insulation and Foam, and Savannah Insulation and Foam, respectively. The branches will provide spray foam, fiberglass and air barrier installation services to residential, multi-family and commercial customers.
Jeff Edwards, Installed Building’s chairman and chief executive officer said, "With total annual revenue of approximately $22 million, these branches expand our presence in two attractive markets. In addition, each branch provides multiple installation services, and end market diversification that fits extremely well within our overall growth strategy."
Acquisitions Bode Well
Since 1999, the company has integrated more than 150 companies through the acquisition strategy. Notably, the buyout strategy has allowed it to diversify product offerings, while expanding into some of the most attractive markets within the United States.
In June, the company acquired Texas-based Nationwide Gutter, LLC. Nationwide Gutter is a provider of gutter installation and repair services, primarily to multi-family and commercial customers.
Acquisitions contributed 35.2% to total revenues in the first six months of the year and 60.8% in second-quarter 2020. The company completed three acquisitions till Jun 30, 2020. Also, it added six businesses in 2019 and 10 in 2018, excluding several small tuck-in buyouts merged into existing operations.
A Look at Second-Quarter Performance
Recently, the company delivered solid second-quarter 2020 results, wherein earnings and revenues not only topped the Zacks Consensus Estimate but also grew on a year-over-year basis.
Adjusted earnings of $1.12 per share surpassed the consensus mark of 77 cents by a whopping 45.4% and increased 28.7% from the prior year. Revenues of $393.9 million topped the consensus mark by 4.7% and improved 5.9% year over year. A 4.8% increase in price/mix, improvement in customer and product growth, as well as solid contribution from the recent acquisitions helped it deliver strong results. Also, ongoing geographic, end-market, and end-product diversification strategies, pricing policy, along with a rebounding homebuilding industry added to the bliss. The company experienced significant growth in multi-family and commercial end markets during the quarter.
Notably, its internal backlog at second quarter-end was up 11% from the comparable prior-year period.
We believe the above-mentioned strategies and positive housing market fundamentals will help the company to grow further.
Shares of this Zacks Rank #3 (Hold) company have gained 56.6% in the past year compared with the industry’s 36.5% growth. You can the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Installed Building Products — which shares space with TopBuild BLD, Arcosa, Inc. ACA and Armstrong World Industries, Inc. AWI in the same industry — is currently a great pick in terms of growth and value investment, supported by a Growth Score of A and Value Score of B.
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