Building Products & Materials Group Overview


Harris Williams is pleased to present our Building Products and Materials Industry Update for February 2019.  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.


Building Products


Distribution & Services


Construction Materials


What We’re Reading

Construction Input Prices Continue to Fall in December1

Associated Builders & Contractors   1/15/2019

Construction input prices declined 1.7% in December on a month-over-month basis yet are 3.5% higher than the same time last year, according to an Associated Builders and Contractors analysis of U.S. Bureau of Labor Statistics data released today. In December, nonresidential construction prices fell 1.6% but are up 4.1% compared to one year ago.

Among 11 subcategories monitored in the data, six declined in price in last month, with the crude petroleum category registering the largest decrease at 3.7% and 11.1% year-over-year. The decline in input prices occurred despite a massive run-up in natural gas prices of 64.3%.

Read the full article here.

Home-Builder Confidence Rebounds from 3-Year Low2

MarketWatch   1/16/2019

The National Association of Home Builders’ monthly confidence index rose 2 points in January to a reading of 58. The January increase reversed two months of declines and beat the Econoday forecast of a 1-point increase. The builder lobby group said falling mortgage rates were buoying sentiment among their members, though there have been other signals that housing may enjoy a rebound in 2019. The index component that tracks current sales conditions rose 2 points to 63 while the tracker of expected conditions over the coming six months was up 3 points to 64. The gauge of buyer traffic ticked up 1 point to 44.

Read the full article here.

Americans Stopped Buying Homes in 20183

Business Insider   1/25/2019

As 2018 headed toward its close, Americans' appetite for buying homes fell off a cliff. In December, US existing-home sales cratered to 4.99 million, 10.3% below the mark from the year-ago period, according to data released earlier this week by the National Association of Realtors. That's the steepest decline in more than seven years, and it followed year-over-year declines of 7.8% in November and 5.1% in October. Home sales dropped in every month in 2018 except February, but the trend grew more aggressive in the final quarter of the year.

Read the full article here.

Remodelers’ Confidence Holds Relatively Steady in Fourth Quarter4

National Association of Home Builders   1/17/2019

The National Association of Home Builders’ (NAHB) Remodeling Market Index (RMI) posted a reading of 57 in the fourth quarter of 2018, only one point lower than the previous quarter. The RMI has been consistently above 50—indicating that more remodelers report market activity is higher compared to the prior quarter than report it is lower—since the second quarter of 2013. The overall RMI averages current remodeling activity and future indicators.

“The overall remodeling market remains strong, but there are signs of concern related to rising labor and input costs,” said NAHB Remodelers Chair Joanne Theunissen, CGP, CGR, a remodeler from Mt. Pleasant, Mich. “Remodelers are battling sticker shock with many home owners who expect lower bids.”

Read the full article here.

Behind Lumber’s Collapse: A Perfect Storm of Housing and Trade5

The Wall Street Journal   1/2/2019

Lumber futures reached a record in May that was 30.0% above the old all-time high set in the early 1990s. Still, lumber ended the year as one of the worst-performing commodities. It isn’t like other commodities had a great year. The Bloomberg Commodity Index, a basket of 22 raw materials, declined 13.0%. But lumber suffered an epic collapse. Since hitting $639 per 1,000 board feet on May 17, futures lost nearly half their value. Lumber ended 2018 down 26.0% and prices slipped further in the first trading session of 2019, settling 1.1% lower at $329 on the Chicago Mercantile Exchange on Wednesday.

A variety of factors had sent prices soaring in the first half of the year. Tariffs were placed on imports from Canada in late 2017, raising the price of much of the softwood that is used to build U.S. homes. Wildfires and wood-boring beetles in British Columbia crimped wood supplies, while deliveries were delayed by rail bottlenecks and shortages of truck drivers just as U.S. home construction seemed to be taking off.

Read the full article here.

Public Markets6



*Calculated as (EBITDA – Capex) / EBITDA

Public Comparables6

Building Products

As of January 31, 2019


Building Products Distributors

As of January 31, 2019


Construction Materials

As of January 31, 2019


Relevant Transactions6




Representative Building Products & Materials Transactions


1. Associated Builders & Contractors

2. MarketWatch

3. Business Insider


5. The Wall Street Journal

6. FactSet



The information and views contained in this report were prepared by Harris Williams LLC (“Harris Williams”). It is not a research report, as such term is defined by applicable law and regulations, and is provided for informational purposes only. It is not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any securities or financial instruments or to participate in any particular trading strategy. The information contained herein is believed by Harris Williams to be reliable but Harris Williams makes no representation as to the accuracy or completeness of such information. Harris Williams and/or its affiliates may be market makers or specialists in, act as advisers or lenders to, have positions in and effect transactions in securities of companies mentioned herein and also may provide, may have provided, or may seek to provide investment banking services for those companies. In addition, Harris Williams and/or its affiliates or their respective officers, directors and employees may hold long or short positions in the securities, options thereon or other related financial products of companies discussed herein. Opinions, estimates and projections in this report constitute Harris Williams’ judgment and are subject to change without notice. The securities and financial instruments discussed in this report may not be suitable for all investors and investors must make their own investment decisions using their own independent advisors as they believe necessary and based upon their specific financial situations and investment objectives. Also, past performance is not necessarily indicative of future results. No part of this material may be copied or duplicated in any form or by any means, or redistributed, without Harris Williams’ prior written consent.

Harris Williams LLC is a registered broker-dealer and member of FINRA and SIPC. Harris Williams & Co. Ltd is a private limited company incorporated under English law with its registered office at 5th Floor, 6 St. Andrew Street, London EC4A 3AE, UK, registered with the Registrar of Companies for England and Wales (registration number 07078852). Harris Williams & Co. Ltd is authorized and regulated by the Financial Conduct Authority. Harris Williams & Co. Corporate Finance Advisors GmbH is registered in the commercial register of the local court of Frankfurt am Main, Germany, under HRB 107540. The registered address is Bockenheimer Landstrasse 33-35, 60325 Frankfurt am Main, Germany (email address: Geschäftsführer/Directors: Jeffery H. Perkins, Paul Poggi. (VAT No. awaited). Harris Williams is a trade name under which Harris Williams LLC, Harris Williams & Co. Ltd and Harris Williams & Co. Corporate Finance Advisors GmbH conduct business.