For M&A investors, 2021 will be a year to remember. How will 2022 stack up? As we head into the new year, Harris Williams Industry Group Heads share their views on which trends will drive growth, key investor considerations, and the opportunities to be found in each of the industries we cover. We look forward to pursuing these opportunities in partnership with our clients in the months to come.
How do you feel about M&A conditions heading into 2022 within your industry?
We’re bullish on 2022. M&A within building products and materials was white-hot for much of 2021. Looking forward, the fundamentals for deal-making remain strong, consumers are in good financial shape, interest rates are low, at least for now, and we’re confident 2022 will be another strong year.
What should M&A investors keep top-of-mind in your industry this year?
Raw material inflation is something to watch. Wood prices have been up and down and that has a real impact on margins. Labor is a constraint, as it is in most industries. For the companies we tend to work with, inflation and scarcity provide opportunities to pull ahead, whether through better supply chain management, employee hiring and retention, or the use of prebuilt assemblies that reduce labor content. It’s definitely an environment that favors scale and professionalization.
Name a few of the most significant trends that will drive growth in your industry in 2022.
The shift toward remote working is creating opportunities. With people being given more flexibility to work from a location of their choosing, we’re seeing demand for housing in places people want to live in versus established metro areas. Also, with more time spent at home, homeowners are more interested in renovation and remodeling to make their space just the way they want it. Often that means a focus on outdoor living and home office space as well as more traditional areas such as kitchen and bath. For many people, the home is becoming the location for a bigger portion of each day, and that often requires some rework of the space.
Labor is another important factor. The sustained shortage of skilled workers drives demand for labor-saving building products, whether preassembled, easier to install, or both. As we mentioned earlier, labor shortages also favor more sophisticated operations that have a better handle on recruitment, retention, and training.
How has your team delivered exceptional client service in this busy market?
As always, we’ve been selective about our engagements so we can provide the kind of service that we pride ourselves on. We have also continued to emphasize the little things, like making sure the whole team is on video calls—visible, engaged, and presentable. We overcommunicate with each other, with clients, and with buyers. Overall, we’ve tried to be very mindful that the service we provide is at the high quality levels we’re known for.
The Harris Williams Building Products & Materials Group has closed transactions across a broad spectrum of building products and materials sectors, with expertise that spans from lighter building products used in residential and commercial markets to heavy construction materials used in infrastructure applications. Within these sectors, our firm has worked with clients that touch every aspect of the production, distribution and related construction services in these markets. For more information, visit the Building Products & Materials Group’s section of the Harris Williams website.
To learn more, please contact our senior bankers.