Blank check company Hennessy Capital Acquisition Corp. II (Nasdaq: HCAC, HCACU and HCACW) will acquire the outstanding capital stock of United Subcontractors Inc. (USI), a provider of insulation systems. HCAC will fund the $348.5 million merger with a combination of cash—which includes a $100 million debt financing--and newly issued shares of commercial stock.

St. Paul, Minnesota-based USI provides installation, construction and distribution services to the residential and commercial construction markets in the U.S. HCAC, headquartered in Houston, Texas, was founded by Daniel J. Hennessey with the intention of executing mergers, capital stock exchanges, asset acquisitions, stock purchases and reorganizations with one or more companies.

“We believe that the USI’s established presence in high-growth construction markets when combined with strategic acquisitions will lead to sustained revenue growth and profitability for our stockholders,” says Hennessy in the firm’s statement. Once combined, the company will be rebranded as USI Holdings, led by current USI President Bill Varner.

HCAC received financial advisement on the deal from UBS Investment Bank, Cantor Fitzgerald & Co., BMO Capital Markets and XMS Capital Partners, and legal advice from Sidley Austin LLP and Ellenoff Grossman & Schole LLP. RBC Capital Markets served as financial adviser to USI, and Willkie Farr & Gallagher acted as legal counsel to the company. Completion of the merger is expected during the third quarter of 2016.

Growth in the homebuilding market is likely to increase in tandem with sales, making for attractive targets in the sector. In February, the sale of new single-family houses increased by 2% over sales recorded for January, according to figures released by the U.S. Census Bureau and the Department of Housing and Urban Development. Recent M&A deals have included Accella Performance Materials, purchase of Quadrant Chemical Corp.’s spray foam division; Distribution International Inc.’s acquisition of insulation distributor 3i Supply Co.; and the Tom Pritzker and Gigi Pritzker Pucker families buying of structural frame maker Lithko Contracting

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