Insulation and building materials products distributors TopBuild and Specialty Products and Insulation (SPI) have mutually agreed to terminate their originally-announced acquisition from July 27, 2023.

Back then, TopBuild said the deal was valued at $960 million.

In an April 22 news release, TopBuild President and CEO Robert Buck detailed what happened:

“We are highly disciplined around our approach to M&A and driving shareholder value. Over the last several months, we worked cooperatively to explore alternatives in a manner consistent with the Department of Justice’s view of the metal building insulation (“MBI”) business, which they defined narrowly. Because the parties were not able to agree to terms at a value that worked for both parties and that would be likely to obtain regulatory approval within the DOJ’s view of the MBI business, we have agreed to terminate the transaction.”

TopBuild and SPI agreed to terminate the transaction and withdrew their Hart-Scott Rodino filings effective April 22. Under the terms of the purchase agreement, TopBuild paid a termination fee of $23 million, per terms of the purchase agreement.

SPI is a portfolio company of Incline Equity Partners, distributing and fabricating insulation and related products used in thermal, acoustic and fire protection applications. 

For the 12 trailing months ended March 31, 2023, SPI had pro forma revenue of approximately $703 million and adjusted EBITDA of $77 million, according to TopBuild’s July 27, 2023 news release. About half of SPI’s revenue is tied to maintenance and repair activity, and the other half is in new construction activity.

SPI is led by CEO Ray Sears and Executive Chairman Jon Perry.

Buck added that Daytona Beach, FL-based TopBuild plans to stay active on the acquisition front, with a “robust” pipeline of opportunities in an addressable market for residential, commercial and industrial and mechanical insulation that the company values at more than $18 billion. 

With 2023 total sales of $5.2 billion, TopBuild has about 240 branches across the United States. It’s Specialty Distribution business unit has about 170 of those branches.