Matrix Capital Markets Group (804) 780-0060 - Case Study: Insulation Consulting and Supply Corp.

Case Study: ICSC - Merger and Recapitalization

Situation

Insulation Consulting Supply Corporation (ICSC) is the largest residential insulation distributor in the U.S. The Company had sales of $109 million and EBITDA of $13.3 million.

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 several future acquisitions and substantial growth.

Solution

Matrix was engaged to selectively market the transaction to private equity firms. Quad-C was identified early on as the best fit for the Company, however the fund required the platform to be greater than $20 million in EBITDA.
Matrix was able to negotiate a merger with the number two distributor in the industry, Denver Distribution, which grew the Company’s sales to $169 million with EBITDA of $19.3 million.
Further, ICSC was able to renegotiate a five year supply agreement with its leading supplier, Knauf Insulation, based on its enhanced buying power that drove EBITDA to $23.5 million post merger.
Quad-C subsequently helped the Company to complete a further 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.