COLUMBUS, Ohio - Installed Building Products, Inc. (NYSE:IBP), a leading installer of insulation and complementary building products, announced today the acquisition of Minnesota-based Wholesale Insulation Supply, also known as Insulation Supplies, a move that adds over $22 million to the company's annual revenue. The acquisition is part of IBP's ongoing growth strategy, which has seen the company expand its annual revenue by over $73 million through acquisitions in 2024.
Insulation Supplies, with its establishment dating back to 1986, operates out of New Hope (OTC:NHPEF), Minnesota, and serves the upper Midwest by distributing a range of insulation products including fiberglass, spray foam, and cellulose, as well as related accessories and machinery. This acquisition is expected to enhance IBP's geographic presence and its ability to serve customers in the residential and commercial sectors throughout the region.
Jeff Edwards, Chairman and Chief Executive Officer of Installed Building Products, expressed his enthusiasm for the acquisition, highlighting Insulation Supplies' track record of exceptional service and growth. Edwards emphasized that acquisitions remain a crucial part of the company's strategy to diversify its services, products, and market reach.
While the press release includes forward-looking statements regarding the company's position in the housing and commercial markets, its financial model, and the demand for its services, it is important to note that such statements are speculative and subject to a variety of market risks and uncertainties.
Installed Building Products manages the installation process for its customers, from material procurement to supply and installation. Its services cater to new and existing residential and commercial building projects across the continental United States, operating from over 250 branch locations.
This acquisition news is based on a press release statement and reflects the company's continued efforts to grow through strategic acquisitions.
In other recent news, Installed Building Products reported an 8% increase in consolidated net revenue for the fiscal 2024 second quarter, hitting $740 million. This growth was primarily driven by the single-family and multi-family end markets. The company also completed acquisitions contributing over $50 million in annual revenue as part of its acquisition strategy. Benchmark revised the price target for Installed Building Products to $250 from the previous target of $260, maintaining a Buy rating on the stock. This follows investor meetings where the company's resilience against potential housing market challenges was highlighted. Despite this, the firm noted a need to moderate expectations for the second half of 2024, leading to a slight reduction in earnings per share forecasts. The company also entered into an agreement to repurchase 100,000 shares of its common stock from PJAM IBP Holdings, Inc., indicating confidence in its financial stability and future prospects. Lastly, Installed Building Products expects to maintain a gross margin range of 32% to 34% and is optimistic about the future.
InvestingPro Insights
Installed Building Products' (IBP) recent acquisition of Insulation Supplies aligns well with its growth strategy, as reflected in the company's financial metrics and market performance. According to InvestingPro data, IBP's revenue growth stands at 3.65% over the last twelve months as of Q2 2024, with quarterly revenue growth at 6.57% in Q2 2024. This acquisition, adding $22 million in annual revenue, is likely to further boost these figures.
The company's strong financial position is evident from its market capitalization of $6.67 billion and an EBITDA of $487.4 million for the last twelve months. IBP's profitability is also noteworthy, with a gross profit margin of 34.07% and an operating income margin of 13.63% over the same period.
InvestingPro Tips highlight that IBP has raised its dividend for 4 consecutive years, with a current dividend yield of 1.26%. This, coupled with a dividend growth of 35.14% over the last twelve months, suggests the company's commitment to returning value to shareholders while pursuing growth through acquisitions.
The stock's performance has been impressive, with a 100.55% total return over the past year and a 32.09% return year-to-date. This strong performance is reflected in the stock trading at 84.65% of its 52-week high.
However, investors should note that IBP is trading at a high P/E ratio of 26.28 and a Price / Book multiple of 9.7, which may indicate the stock is priced at a premium. The PEG ratio of 4.57 suggests that the stock might be trading at a high valuation relative to its earnings growth.
For readers interested in a more comprehensive analysis, InvestingPro offers 12 additional tips for IBP, providing a deeper insight into the company's financial health and market position.
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