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Installed Building (IBP) Buys AMD Distribution, Expands Reach
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Installed Building Products, Inc. (IBP - Free Report) has been banking on a robust pipeline of acquisition opportunities across multiple geographies, products and end markets. On that note, the company acquired Spring Valley, MN-based AMD Distribution, Inc. ("AMD").
This leading installer of insulation and complementary building products expects the acquisition to be immediately accretive to earnings.
Founded in 2001, AMD has eight locations, including three bonded warehouses, generating approximately $71 million of annual revenues across 21 states throughout the Midwest and Mountain West. AMD distributes installation-related products and materials in residential, commercial and agricultural end markets. Also, it distributes accessories and equipment used throughout the insulation installation process.
Jeff Edwards, chairman and chief executive officer, said, “Over the long-term, we expect AMD will improve the flexibility of both our supply chain and cost structure for insulation accessories. Additionally, we believe there is an opportunity for this platform to contribute to the growth of our complementary building products."
So far in 2021, the company completed acquisitions contributing approximately $211 million of annual revenues, outperforming its own target of $100 million for the year. The company expects to invest more in such business going forward and anticipates strong prospects for 2022.
Inorganic Strategies: A Boon
Acquisitions are a key component of Installed Building’s growth strategy. The company has a robust pipeline of acquisition opportunities across multiple geographies, products and end markets.
Image Source: Zacks Investment Research
As part of the ongoing strategy to expand geographically and boost its share in certain markets, it completed seven business combinations during the first nine months of 2021, contributing nearly $44 million to annual revenues and $2.3 million to net income. The company continues to prioritize profitable growth through its strategy of acquiring well-run installers of insulation and complementary building products.
Beazer Homes USA, Inc. (BZH - Free Report) currently sports a Zacks Rank #1. This Atlanta-based homebuilder continues to gain from strong operational execution and consistent strength in the housing market.
Beazer Homes’ shares have gained 46.1% in the past year compared with the industry’s 35.3% rally. Earnings are expected to rise 23.7% in fiscal 2022.
TRI Pointe Group Inc. (TPH - Free Report) currently carries a Zacks Rank #2. This Irvine, CA-based homebuilder designs, constructs and sells single-family detached and attached homes in the United States. Robust demand and pricing as well as improved operating leverage, have been driving TRI Pointe's performance. Cost-cutting initiatives implemented earlier this year and focus on entry-level buyers have been adding to the positives.
TRI Pointe’s shares have surged 57.6% in the past year. Earnings for 2021 and 2022 are expected to rise 80.2% and 9.6%, respectively.
Meritage Homes Corporation (MTH - Free Report) ) currently sports a Zacks Rank #1. Based in Scottsdale, AZ, Meritage Homes is one of the leading designers and builders of single-family homes. Its focus on entry-level LiVE.NOW homes has been a major driving factor.
MTH has gained 44.9% in the past year. Earnings are expected to increase 74.4% in 2021 and 22.2% in the next year.
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Installed Building (IBP) Buys AMD Distribution, Expands Reach
Installed Building Products, Inc. (IBP - Free Report) has been banking on a robust pipeline of acquisition opportunities across multiple geographies, products and end markets. On that note, the company acquired Spring Valley, MN-based AMD Distribution, Inc. ("AMD").
This leading installer of insulation and complementary building products expects the acquisition to be immediately accretive to earnings.
Founded in 2001, AMD has eight locations, including three bonded warehouses, generating approximately $71 million of annual revenues across 21 states throughout the Midwest and Mountain West. AMD distributes installation-related products and materials in residential, commercial and agricultural end markets. Also, it distributes accessories and equipment used throughout the insulation installation process.
Jeff Edwards, chairman and chief executive officer, said, “Over the long-term, we expect AMD will improve the flexibility of both our supply chain and cost structure for insulation accessories. Additionally, we believe there is an opportunity for this platform to contribute to the growth of our complementary building products."
So far in 2021, the company completed acquisitions contributing approximately $211 million of annual revenues, outperforming its own target of $100 million for the year. The company expects to invest more in such business going forward and anticipates strong prospects for 2022.
Inorganic Strategies: A Boon
Acquisitions are a key component of Installed Building’s growth strategy. The company has a robust pipeline of acquisition opportunities across multiple geographies, products and end markets.
As part of the ongoing strategy to expand geographically and boost its share in certain markets, it completed seven business combinations during the first nine months of 2021, contributing nearly $44 million to annual revenues and $2.3 million to net income. The company continues to prioritize profitable growth through its strategy of acquiring well-run installers of insulation and complementary building products.
Coming to price performance, shares of this Zacks Rank #3 (Hold) company have gained 36.1% year to date compared with the Zacks Building Products – Miscellaneous industry’s 14.3% rise. Earnings for 2021 are expected to grow 26.7% year over year. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Some Top-Ranked Stocks in the Construction Sector
Beazer Homes USA, Inc. (BZH - Free Report) currently sports a Zacks Rank #1. This Atlanta-based homebuilder continues to gain from strong operational execution and consistent strength in the housing market.
Beazer Homes’ shares have gained 46.1% in the past year compared with the industry’s 35.3% rally. Earnings are expected to rise 23.7% in fiscal 2022.
TRI Pointe Group Inc. (TPH - Free Report) currently carries a Zacks Rank #2. This Irvine, CA-based homebuilder designs, constructs and sells single-family detached and attached homes in the United States. Robust demand and pricing as well as improved operating leverage, have been driving TRI Pointe's performance. Cost-cutting initiatives implemented earlier this year and focus on entry-level buyers have been adding to the positives.
TRI Pointe’s shares have surged 57.6% in the past year. Earnings for 2021 and 2022 are expected to rise 80.2% and 9.6%, respectively.
Meritage Homes Corporation (MTH - Free Report) ) currently sports a Zacks Rank #1. Based in Scottsdale, AZ, Meritage Homes is one of the leading designers and builders of single-family homes. Its focus on entry-level LiVE.NOW homes has been a major driving factor.
MTH has gained 44.9% in the past year. Earnings are expected to increase 74.4% in 2021 and 22.2% in the next year.