Innovative Plan
When Quad-C first met Bob Bailie, he was looking for a partner to help him pursue a roll-up of residential fiberglass insulation contractors. At that time Bob’s business was a mix of both residential fiberglass insulation distributors and contractors. After studying the situation carefully, we collectively concluded that distribution represented a more attractive consolidation opportunity because there was no consolidation competition and distribution appeared less cyclical than contracting.

In July 1998, Service Partners was formed through a merger and recapitalization transaction which gave management partial liquidity while retaining a 43% ownership stake and provided capital to support the Company’s consolidation strategy.

23 Acquisitions in 26 Months
Over the next two years, we worked with Service Partners’ management team to execute the strategy developed during the months preceding Quad-C’s investment. Quad-C assisted the Company in expanding its corporate infrastructure, including hiring individuals who eventually took the roles of chief executive officer, chief financial officer, controller, and vice president of management information systems to complement the talented operational and sales focused entrepreneurial management team that already existed. With this team in place, Service Partners was able to execute on its consolidation strategy, acquiring 23 distribution and application companies in 26 months. As the largest distributor and third largest purchaser of residential fiberglass insulation in the country, Service Partners’ management team was able to significantly leverage its purchasing power with suppliers and immediately improve the margins of the acquired companies. Through the Company’s acquisition program, Service Partners established a strong presence on the West Coast and Pacific Northwest. Management also focused on product diversification and became one of the largest distributors of insulation accessory products and metal building insulation, as well as a leading distributor and installer of fireplaces, drywall, and roofing shingles.

A Second and Third Bite of the Apple for Management
In October of 2000, Quad-C recapitalized Service Partners with another private equity firm, creating significant liquidity for our investors and management partners. Two years later, Service Partners was sold to Masco, generating additional gains for management and our investors.