Consolidated the Highly Fragmented Insulation Distribution Industry via a Buy and Build Strategy
Capstreet originally invested in Thorpe Holdings (“Thorpe”), which consisted of an insulation distribution business and a refractory services business. We successfully spun out the refractory business from the insulation distribution business to maximize operating efficiency, and then merged Thorpe’s insulation distribution business with major competitor, Distribution International. The result was the company became a distributor of insulation, related specialty fabricated products, and accessory supplies in North America.
Path to Value Creation
- Recruited CEO, VP Operations, HR Director and Controller
- Recruited outside directors
- Completed merger with major U.S. competitor
- Completed two major Canadian acquisitions
- Completed seven additional acquisitions under Capstreet ownership
- Scale created significant buying power
- Improved sourcing and implemented strategic pricing, driving significant margin expansion
This case study is included for informational purposes and should not be construed as a recommendation of any particular investment. A complete list of Capstreet’s current and prior investments is available upon request. It should not be assumed that investments made by the Fund will be comparable in quality or performance. Capstreet’s investment strategy involves substantial risks and uncertainties including the potential loss of all or a substantial portion of invested capital. There is no guarantee that Capstreet will successfully execute its investment strategy or achieve its investment objective(s). Information included herein relating to market characterization has been determined by Capstreet as of January 2023. Although Capstreet believes that such determinations are reasonable, they are inherently subjective in nature. Other market participants may make different determinations based on the same underlying data.