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Item 2.01
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Completion of Acquisition or Disposition of Assets.
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On January 5, 2017, Installed Building
Products, Inc. (the “Company”) consummated its previously announced acquisition (the “Acquisition”) of all of the outstanding shares of (i) Trilok Industries, Inc. (“Trilok”), (ii) Alpha Insulation &
Waterproofing, Inc. (“Alpha”), and (iii) Alpha Insulation & Waterproofing Company (“Alpha Company” and together with Trilok and Alpha, the “Alpha Companies”). The Company acquired the Alpha Companies from
entities affiliated with Vikas Verma and Henry Schmueckle pursuant to a Share Purchase Agreement (the “Purchase Agreement”), dated October 29, 2016, among (i) EMPER Holdings, LLC, an indirect wholly owned subsidiary of the
Company (the “Purchaser”), (ii) each of PREEM Holdings I, LLC and PREEM Holdings II, LLC, (iii) each of Vikas Verma and Henry Schmueckle, (iv) Vikas Verma in his capacity as the Equityholders’ representative and
(v) the Company.
Founded in 1982, the Alpha Companies are headquartered in Atlanta, Georgia and serve commercial customers through an expanding
network of nine branch locations located in Georgia, Florida, Texas, Tennessee and North Carolina. The Alpha Companies’ products include waterproofing, insulation, fireproofing and fire stopping. The Alpha Companies service large, long-lead
time commercial projects including office buildings, airports, sports complexes, museums, hospitals, hotels and educational facilities.
The aggregate
consideration for the Acquisition was $92,120,000 (the “Purchase Price”). The Company paid $9,212,000 of the Purchase Price on behalf of the Purchaser by issuing 282,577 shares of its common stock. Of the remaining amount, the Purchaser
paid $81,908,000 in cash (the “Cash Consideration”) and retained $1,000,000 (the “Holdback Amount”) to hold in escrow for customary adjustments for cash and net working capital. The Purchaser expects to transfer the Holdback
Amount, as adjusted in accordance with the Purchase Agreement, promptly following the completion of the customary adjustments. The Purchaser also paid in full certain indebtedness of the Alpha Companies. The amount of indebtedness paid by the
Purchaser did not exceed $350,000.
The Purchaser may also be required to pay an additional amount in cash as earnout consideration. The earnout payment
will be equal to three times the amount, if any, by which the total EBITDA for the Alpha Companies’ fiscal year ended December 31, 2016 exceeds $15,655,477.
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Item 2.03
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Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
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On January 3, 2017, the Company drew down $92,500,000 from its Delayed Draw Term Loan (“DDTL”), which is a part of its senior secured credit
facility provided by a Credit and Security Agreement dated February 29, 2016, and contributed a portion of such amount to the Purchaser to fund a portion of the Cash Consideration. Following the draw down, the Company had approximately
$105,000,000 outstanding under its DDTL.
A summary of the material terms of the DDTL and the Credit and Security Agreement is included in the
Company’s Form 8-K filed on March 1, 2016 and such summary is incorporated herein by reference.