Capstone Partners, a middle market investment banking firm, released its latest Building Products M&A Update reporting that growing project backlogs, federal and private construction spending trends, and optimistic sentiment among sector participants are supporting healthy merger and acquisition (M&A) activity in the sector.
Despite the ongoing challenges facing the space, M&A volume in the Building Products sector remained elevated in 2022, with 286 transactions announced or completed, compared to 296 transactions in 2021. The Building Products sector has been resilient to market instability with transaction volume down a modest 3.3 percent YOY compared to a 15.9 percent decline in total middle market M&A volume during the same period. Strategic acquisitions accounted for the majority of activity in 2022 as strategic buyers leveraged inorganic growth strategies to build out production and distribution capabilities and address lingering concerns sparked by the COVID-19 pandemic.
Private Equity expanded its presence in the space last year, with total sector sponsor deal volume rising 8.8 percent year-over-year. Private equity investments in the Building Products sector have been fueled by robust projections for future growth and strong backlogs.
Also included in this piece:
- How inflation is affecting construction financing and project completion timelines.
- Which segments are recording the strongest YOY construction spending growth.
- Analysis of trends driving future sector stability, including federal funding initiatives.
- Recent case studies on how strategic buyers are utilizing inorganic growth strategies to build out production and distribution capabilities.
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