Case Study:

Insulation Consulting Supply Corporation - Merger & Recapitalization

Situation

• Insulation Consulting & Supply Corporation (ICSC) is the largest residential insulation distributor in the U.S. The Company had sales in excess of $100 mm and EBITDA of more than $13 mm.

Objective

• ICSC had grown successfully through six add-on acquisitions, but sought to recapitalize with a private equity firm that would be able to finance future acquisitions and substantial growth.

Solution

• Matrix was engaged to conduct a targeted marketing process to raise capital primarily from private equity firms.  Quad-C was identified early on as the best fit for the Company, however the fund required a larger platform given the particular industry dynamics.
• Matrix was able to negotiate a merger with the number two distributor in the industry, Denver Distribution, which grew the Company’s sales to nearly $170 mm and EBITDA close to $20 mm.
• Further, ICSC was able to renegotiate a five year supply agreement with its leading supplier and based on its enhanced buying power, EBITDA increased by more than twenty percent post merger.
• Quad-C helped the Company to complete an additional 23 acquisitions in 26 months before it recapitalized the Company again with another private equity group, Monitor Clipper Partners.  The Company was subsequently sold to Masco Corporation, at which time sales had grown to more than $600 million.