Building materials – The M&A dance, take your partner

  • Written By: Brian Livingston
  • Published: Mon, 16 Aug 2021 16:20 GMT

Have you noticed the recent flurry of transaction activity in the Building Materials sector? Building Materials specialist Brian Livingston considers why this is taking place and what the resulting future could look like.

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With newly adopted strategies that involve focusing on core assets to improve overall margins, there has been a number of non-core disposals by larger players in the sector. Balanced against has been a consolidation play taking place towards the smaller end of the market, with regional merchant groups growing at speed by making multiple acquisitions to achieve economies of scale as well as increase their geographical presence and customer base. In this market update Building Materials specialist Brian Livingston assesses how these trends interact and the impact they’re having on the changing landscape in the sector.

“Historically competition for assets in the Building Materials sector has not been great, keeping transaction prices low. Appetite is growing and competition for assets is going to increase as this trend gathers momentum, potentially forcing prices up. In this article we look at the rationale for the flurry of recent deals in the space and what the changing Building Materials landscape could look like when the dust settles”.

We also consider the role of private equity in the sector and its driving force in the emergence of a middle ground between larger players and one-or-two site distributors, following a number of simultaneous acquisitions from the likes of Blackstone-backed Huws Gray and Grant & Stone, a portfolio asset of Cairngorm Capital, creating some of the largest independent merchanting groups in the UK.

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Brian Livingston, Managing Director and Building Materials Specialist

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By necessity, this briefing can only provide a short overview and it is essential to seek professional advice before applying the contents of this article. This briefing does not constitute advice nor a recommendation relating to the acquisition or disposal of investments. No responsibility can be taken for any loss arising from action taken or refrained from on the basis of this publication. Details correct at time of writing.

© 2021 Oaklins. All rights reserved. Oaklins is the collective trade name of independent member firms affiliated with Oaklins International Inc. For details of the nature of affiliation, please refer to Smith & Williamson Corporate Finance Limited t/a Oaklins Smith & Williamson is a private firm which offers financial advisory services.

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