Building Products & Materials Group Overview

Introduction

Harris Williams is pleased to present our Building Products & Materials Industry Update for October  2020. 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.

Our Practice

Harris Williams is a leading advisor to the building products and materials industry. Our significant experience covers a broad range of end markets, industries, and business models.

Building Products

  • Building Envelope
  • Cabinets and Countertops
  • Decking and Siding
  • Drywall and Ceiling Tiles
  • Flooring
  • HVAC and Electrical
  • Insulation
  • Lighting
  • Lumber
  • Plumbing Fixtures
  • PVF and Water Management
  • Roofing
  • Tools and Hardware
  • Windows and Doors

Distribution & Services

  • Architectural and Engineering
  • Contracting
  • Distribution
  • Infrastructure Services
  • Installation
  • Site Development

Construction Materials

  • Aggregates
  • Asphalt
  • Brick
  • Concrete (Precast / Ready-Mix)
  • Glass
  • Industrial Minerals
  • Metals
  • Stone

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What We’re Reading

ABC’s Construction Backlog Indicator Rebounds in August; Contractor Optimism Builds1

Associated Builders and Contractors  9/15/2020

Associated Builders and Contractors reported today that its Construction Backlog Indicator rebounded to 8.0 months in August, an increase of 0.2 months from July’s reading, according to an ABC member survey conducted Aug. 20-Sept. 1. The August backlog is a half-month lower than in August 2019.

“The construction backlog and confidence indicators both surprised to the upside in this report,” said ABC Chief Economist Anirban Basu.

Read the full article here.

U.S. Homebuilder Confidence Hits Record High in September2

Reuters  9/16/2020

The NAHB/Wells Fargo Housing Market Index (HMI) rose five points to an all-time high of 83 this month, data showed on Wednesday. A reading above 50 indicates that more builders view conditions as good than poor.

“The suburban shift for home building is keeping builders busy, supported on the demand side by low interest rates. In another sign of this growing trend, builders in other parts of the country have reported receiving calls from customers in high-density markets asking about relocating,” said NAHB chief economist Robert Dietz.

Read the full article here.

New-home Construction Pulls Back Slightly, as Builders Shift Attention Away from the Multifamily Sector3

Market Watch  9/17/2020

U.S. home builders started construction on homes at a seasonally adjusted annual rate of 1.42 million in August, representing a 5% decrease from the previous month but a 3% uptick from a year ago, the U.S. Census Bureau reported Thursday.

The dip in housing starts and building permits was driven by declines in multifamily construction activity. Multifamily starts fell 25% between July and August, while the number of new permits issued for multifamily buildings dropped 17% month over month.

Read the full article here.

Existing Home Sales Jump to 14-year High, as Prices Set Another Record4

CNBC  9/22/2020

Sales of existing homes rose 2.4% to a seasonally adjusted annualized rate of 6 million units, according to the National Association of Realtors. Sales were 10.5% higher compared with August 2019. This is the highest sales pace since December 2006.

“In early September, new housing supply took a hit from the wildfires and hurricanes, and sales activity weakened. But because the impact of natural disasters has been more supply-oriented than demand-oriented, prices are expected to remain high,” said Danielle Hale, chief economist at realtor.com.

Read the full article here.

Home Prices in 20 US Cities Accelerate the Most Since 20185

Bloomberg  9/29/2020

The S&P CoreLogic Case-Shiller index of property values increased 3.9% from 2019, beating the estimate of 3.6%. It was the biggest year-over-year increase since December 2018.

The biggest increases came in Phoenix (9.2%), Seattle (7%), and Charlotte (6%). New York (1.3%), Chicago (0.8%), and San Francisco (2.5%) saw the smallest gains in July among the 20 cities tracked by the index.

Read the full article here.

Public Markets6

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*Calculated as (EBITDA – Capex) / EBITDA

Public Comparables6

Building Products

As of September 30, 2020

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Building Products Distributors

As of September 30, 2020

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Construction Materials

As of September 30, 2020

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Relevant Transactions7

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Representative Building Products & Materials Transactions

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1. Associated Builders and Contractors

2. Reuters

3. Market Watch

4. CNBC

5. Bloomberg

6. Capital IQ

7. Mergermarket