Advent International (“Advent”), one of the largest and most experienced global private equity investors, has entered into an agreement to sell Distribution International Inc. (“DI”), North America’s leading mechanical insulation distributor, to TopBuild Corp. (NYSE:BLD) in an all-cash transaction valued at $1.0 billion. TopBuild, a leading installer and distributor of insulation and building material products to the U.S. construction industry, expects to fund the acquisition using a combination of debt financing and cash on hand.

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Founded in 1986, DI is North America's leading specialty distributor and custom fabricator of mechanical insulation and related accessories for industrial and commercial end-markets. During its partnership with Advent, the company has solidified its position as the largest player in the $5 billion mechanical insulation market, executing on a variety of growth initiatives. DI successfully expanded into new product categories, including metal building insulation, broadened its end-market focus in areas such as marine and datacenters, and developed leading digital tools for its customers. It also completed 11 acquisitions, adding new geographies and broadening its product focus.

During this time, DI’s footprint grew by nearly 50 locations, to 101 branches across the U.S. and Canada, and its revenue grew by more than 50%, to approximately $747 million for the trailing 12 months ended June 30, 2021, on a pro forma basis. This growth enabled the company to help more customers lower their energy consumption and carbon footprint, while creating safer work environments for their employees.

“Over the course of our partnership, DI has cemented its position as the No. 1 distributor and preferred partner for mechanical insulation products in North America through significant investments in M&A, platform expansion, people development, and operational effectiveness,” said Stephen Hoffmeister, Managing Director at Advent International. “We’re excited for DI to build on its success as part of TopBuild, which is ideally positioned to support DI’s continued growth and goal of being the best employer in the broader distribution industry. We wish the team at DI all the best in this next phase of their journey.”

“We are proud of what we’ve achieved working with Advent and are grateful for their support and expertise, which has been instrumental to our growth,” said Steve Margolius, President and Chief Executive Officer of DI. “As we take this next step, we’re eager for the new growth opportunities our partnership with TopBuild offers, underpinned by a strong, shared commitment to people, safety, and service. We look forward to working with them to continue our momentum and even better serve the needs of our customers.”

According to Robert Buck, President and CEO of TopBuild, “The acquisition of Distribution International is highly strategic for TopBuild. It aligns with our strategy of seeking well-managed companies with experienced, talented teams with expertise in our core business of insulation and adjacent products. DI provides us with a direct entry and immediate leadership position in the $5 billion mechanical insulation market, which is a highly attractive and complementary new growth platform for TopBuild.”

Advent has significant investment experience in the industrial sector. Since 1990, the firm has invested $12 billion in over 80 companies across a range of subsectors including distribution, building products, packaging, capital goods, and chemicals and materials. In addition to DI, Advent’s distribution investments include Rubix, MORSCO, ABC Supply, Bradco Supply and GTM.

The transaction, which has been approved by TopBuild’s Board of Directors, is subject to regulatory approval and other customary closing conditions and is expected to close in the fourth quarter of 2021.

RBC Capital Markets, LLC is serving as financial advisor, and Weil, Gotshal & Manges LLP is acting as legal counsel to Advent and DI. J.P. Morgan Securities LLC is serving as financial advisor, and Jones Day is acting as legal counsel to TopBuild.

ABOUT DISTRIBUTION INTERNATIONAL

Founded in 1986, DI is a value-added distributor of insulation-related specialty fabricated products, HVAC products, and safety supplies in North America. The Houston-based company has over 100 locations and provides its customers with mission-critical products and services across the commercial building, chemicals, energy, power, railcar and marine end-markets. The company has the broadest reach of any distributor in its market in the U.S. and Canada.

For more information, visit www.distributioninternational.com, www.crossroadsci.com or www.silvercote.com.

ABOUT ADVENT INTERNATIONAL

Founded in 1984, Advent International is one of the largest and most experienced global private equity investors. The firm has invested in over 380 companies in 42 countries, and as of March 31, 2021, had $75 billion in assets under management. With 14 offices in 11 countries, Advent has established a globally integrated team of over 245 investment professionals across North America, Europe, Latin America and Asia. The firm focuses on investments in five core sectors, including business and financial services; healthcare; industrial; retail, consumer and leisure;

and technology. After more than 35 years dedicated to international investing, Advent remains committed to partnering with management teams to deliver sustained revenue and earnings growth for its portfolio companies.

For more information, visit:
Website: www.adventinternational.com
LinkedIn: www.linkedin.com/company/advent-international

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