Q2 2017 Building Products & Materials M&A Market Update

This issue of the Building Products & Materials (BP&M) newsletter highlights the macroeconomic drivers supporting the ongoing resurgence in mergers and acquisitions (M&A) activity in the sector and rapidly rising valuations. Optimistic buyers continue to aggressively seek deals due to strong economic fundamentals and robust construction activity. In particular, optimism in the market for new single-family homes is holding strong, likely due to the shortage of existing inventory in the market and high demand for housing. While housing starts slowed somewhat in March, dropping 6.8 percent from February to a seasonally adjusted annual rate of 1.215 million, starts were up 9.2 percent year-over-year, with growth in building permit authorizations pointing to more construction activity likely in the coming months.
 

Based on our own announced transactions and other deals we and others have in the market, we expect 

that the building products sector will continue to experience robust M&A activity during the remainder of 2017. Strategic players are seeking to grow market share via acquisition and are looking to augment their brand portfolio and technological advantage while improving their supply channels and network. Meanwhile, a large number of private equity firms have returned to the sector after a long hiatus, seeking opportunities for new platforms and bolt-on acquisitions for existing portfolio companies.