BGL Industrials Insider 

Solid Foundation for Accelerating M&A in Building Products

Secular strength is fueling a white-hot M&A market in Building Products with investor appetite broad-based, according to an industry report released by the Building Products investment banking team at Brown Gibbons Lang & Company (BGL). Growth is in focus, and high-quality deals are attracting significant competition, which is driving up valuations.

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Andrew K. Petryk
Managing Director

Kevin H. Sargent
Managing Director

In the report, BGL examines the current state of the market as well as near-term outlook. Macro indicators point to continued growth, echoed by industry participants reporting strong business performance. Residential construction spending was up nearly 15% in December year-over-year. Forecasts for repair and remodeling activity project double-digit growth through year-end. Com­mercial building markets are rebounding with a full recovery anticipated in 2022. While supply chain disruptions, inflation, and a tight labor market persist, consumer demand remains robust with many companies experiencing record backlogs and implementing pricing actions to preserve margins.

2022 is expected to remain very active, buoyed by economic growth and capital availability. The broader private equity market is exhibiting an almost frenetic pace of capital deployment following an unprecedented year for deal making in 2021, with deal volume and value breaking all-time records. Platinum Equity, Dunes Point Capital, The Riverside Company, Centerbridge Partners, and Sun Capital Partners are among the financial sponsors to recently announce new platform investments in the space. Corporate buyers are discerning but moving fast for highly complementary assets. Westlake Chemical, Carlisle Companies, and Nucor headlined deal activity, each announcing billion-plus transactions, while Builders FirstSource, Cornerstone Building Brands, Core & Main, and PGT Innovations were among the notable buyers with multiple tuck-in acquisitions to expand scale and footprint in fragmented marketplaces.  

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