Installed Building Products (IBP), the Columbus, Ohio company best known for blowing insulation into new houses, has bought Old Dominion Group (ODG), a mechanical and industrial contractor that installs insulation, firestopping and related products. IBP said on 12 November 2026 that the deal had closed at an enterprise value of $698 million, about 60 per cent in cash and 40 per cent in IBP stock, according to its announcement.
What does IBP get for $698 million? A business with about $370 million of revenue and $67.9 million of adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) over the twelve months to 30 September. By this publication's arithmetic that is 10.3 times EBITDA. IBP's own figure, 9.3 times, counts $7 million of savings it has not yet made. On top of the price, IBP has promised up to $180 million of stock to as many as 50 of ODG's employees if the business hits its targets.
How was the price built?
From a $725 million base, IBP said. It reports the enterprise value net of $27 million of transaction bonuses payable at closing. It paid the cash from cash on hand, "including proceeds of its 2026 Incremental Term Loans," and issued 1,381,731 shares to ODG's former owners, according to the 8-K. Another 54,807 shares went to key ODG employees as transaction-funded awards.
| Measure | Figure | Multiple of $698 million |
|---|---|---|
| Revenue | $370 million | 1.9 times |
| Adjusted EBITDA | $67.9 million | 10.3 times |
| Adjusted EBITDA plus $7 million expected savings | $74.9 million | 9.3 times |
The release puts expected savings at $6 million to $8 million a year within 24 months, mostly from buying materials together and sharing administration. IBP said leverage after the deal would be about 1.9 times, and that the purchase would add to earnings per share immediately.
Why would IBP pay that much?
Margins and mix. ODG's adjusted EBITDA margin was 18.4 per cent over the twelve months. IBP's was 15.9 per cent in its third quarter and 15.6 per cent for the first nine months of 2026, down from 16.9 per cent a year earlier, according to its 5 November results. The buyer is paying for a business that earns more on each dollar than it does.
Mix matters more. Residential new construction was 67 per cent of IBP's revenue in the first nine months of the year and fell 5.2 per cent, while commercial revenue rose 14.7 per cent. Chairman and chief executive Jeff Edwards described "continued softness in residential construction activity" in that release. Builders' order books tell the same story; PulteGroup's orders fell 6 per cent in the quarter we reported, with mortgage rates above 7 per cent. IBP says ODG lifts commercial work from about 20 per cent of its revenue to about 28 per cent.
It is also a different size of deal for IBP. The company had bought about $67 million of annual revenue in smaller acquisitions by the end of September, and four deals in the third quarter added about $22 million between them. ODG alone brings more than five times the revenue of the year's earlier purchases.
What are the $180 million awards?
A retention bet, and the largest number in the filing after the price. IBP's compensation committee approved performance-based awards for "up to 50 key non-executive employees who joined the Company in connection with the Acquisition," with "an aggregate target grant-date value of $180 million and a maximum potential issuance of 2,500,000 shares." They vest on milestones "measured over three- and five-year cumulative performance cycles," and only for those still working at the business. None of the recipients is an IBP executive officer, and the awards were granted under the New York Stock Exchange's exemption for inducement grants, which do not need a shareholder vote.
By our arithmetic the target value equals about 26 per cent of the enterprise value, or $3.6 million per recipient on average if all 50 places are filled. The share cap is the more striking comparison. The sellers received 1,381,731 IBP shares. The awards could issue up to 2.5 million, about 1.8 times as many. IBP does not say whether the targets are set at ODG's current earnings or above them, which is what decides how much of the $180 million is ever paid.
This is the same question we asked of Archrock's purchase of HiVolt this week: how much of a price depends on results that have not happened yet. In ODG's case, about a quarter of the economic cost sits in awards that pay only if the business grows.
What to watch
ODG's chief executive, Jeff Davoud, said IBP is "the ideal partner to support the next phase of our growth," and will keep running the mechanical and industrial business under its regional brands. IBP's next quarterly report will be the first to include ODG and should show whether the 18.4 per cent margin survives consolidation. The first award cycle runs three years, and the $6 million to $8 million of savings is promised within two.
Deal terms, ODG's twelve-month results, synergies, leverage, the commercial revenue share and executives' quotations are from IBP's press release of 12 November 2026 (Exhibit 99.1 to its 8-K). Share issuance, financing, closing date and the terms of the inducement awards are from the 8-K itself. IBP's third-quarter and nine-month results and its 2026 acquisitions are from its earnings release of 5 November 2026. The multiples before synergies, the revenue multiple, the awards as a share of enterprise value and per recipient, the share comparison and the margin comparison are this publication's arithmetic. The analysis is our own.
Topics businessmergers and acquisitionsconstructionexecutive pay
