Introduction

Harris Williams & Co. is pleased to present our Building Products and Materials Industry Update for March 2018. This report provides commentary and analysis on current capital market trends and merger and acquisition dynamics within the global building products and materials industry.

We hope you find this edition helpful and encourage you to contact us directly if you would like to discuss our perspective on current industry trends and M&A opportunities or our relevant industry experience.

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What We're Reading

HOME PRICES CONTINUED TO RISE IN JANUARY

Wall Street Journal - March 27, 2018

"Home prices continued to grow at a rapid pace in the first month of 2018, as a new tax law and rising mortgage rates made little dent in demand in the early weeks of the year. The S&P CoreLogic Case-Shiller National Home Price Index, which measures the price of a typical single-family home in major metropolitan areas across the country, rose 6.2% in January, down slightly from a 6.3% year-over-year increase reported in December. Home price gains picked up steam in 2017 compared with 2016. The national Case-Shiller index, which reached a new high in late 2016, is now 6.3% above the prior peak reached in 2006."
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CONSTRUCTION SEES BEST MONTH OF JOB GROWTH SINCE MARCH 2007

Construction Dive - March 9, 2018

"The construction industry had its strongest month of job growth since March 2007 in February, adding 61,000 net new jobs, the U.S. Bureau of Labor Statistics reported Friday. Jobs were up 254,000 year-over-year. The nonresidential sector increased by 35,400 jobs for the month, marking a significant gain from January's 21,000 net new roles. Nonresidential specialty trades accounted for the strongest growth, notching 19,000 jobs in February."
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STUDY SAYS NEW HOUSING WILL BE MORE EXPENSIVE WITH NEW TARIFFS

Professional Builder - March 23, 2018

"The proposed tariffs on steel at 25%, and aluminum at 10%, would make new construction homes more expensive, says National Association of Home Builders’ research economist Scholastica (Gay) Cororaton.

Last year, the United States imported steel and aluminum assets worth $47.8 billion. This year, tariffs would be imposed on those same products. While such imports account for only 2% of the total goods imported by the U.S., worth $2.3 trillion, the impact on the housing and automotive industries will feel the most impact, concludes the National Association of Home Builders."
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BUILDER CONFIDENCE REMAINS ON SOLID FOOTING IN MARCH

National Association of Home Builders - March 15, 2018

"Builder confidence in the market for newly-built single-family homes edged down one point to a level of 70 in March from a downwardly revised February reading on the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) but remains in strong territory.

'A strong labor market, rising incomes and a growing economy are boosting demand for homeownership even as interest rates rise,' said NAHB Chief Economist Robert Dietz. 'With these economic fundamentals in place, the single-family sector should continue to make gains at a gradual pace in the months ahead.' "
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BUILDING MATERIAL SALES FOR BIG BOXES, DEALERS ROSE 5.9% IN 2016

ProSales - March 28, 2018

"Home centers and building material and supplies dealers sold a combined $304.6 billion worth of goods in 2016, a 5.9% increase from the previous year, fresh Census Bureau data shows. Comparisons with ProSales 100 firms also suggest the biggest pro dealers accelerated their growth faster than the group as a whole."
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Public Markets

Public Comparables


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Relevant Transactions



Information included in this Industry Update was sourced from FactSet. ​