TopBuild Corp. (BLD), an installer and specialty distributor of insulation, on Tuesday announced that it has entered into an agreement to acquire a portfolio company of Bow River Capital, Progressive Roofing Inc., for $810 million in cash.
The deal expected to close in the early third quarter of 2025 might help boost adjusted earnings per share. The acquisition will be instrumental in expanding TopBuild's presence in the commercial construction market and adds more stable, non-cyclical revenue, with 70 percent of Progressive's sales coming from re-roofing and maintenance.
The company said the deal provides a strong platform for future growth with the commercial roofing market valued at around $75 billion and highly fragmented.
The transaction will be funded through cash and TopBuild's credit facility. The pro forma net debt to EBITDA will be approximately 1.6x.
The deal values Progressive at about 9.1 times its EBITDA for the 12 months ending March 31. After factoring in $5 million in expected cost savings, the multiple drops to 8.6 times.
Progressive Roofing is a U.S.-based commercial roofing services provider founded in 1978. Headquartered in Phoenix, Progressive has over 1,700 employees across 12 branches.
In the pre-market trading, TopBuild is 0.16% higher at $344.24 on the New York Stock Exchange.
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