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Mike Rosendahl

E: mrosendahl@pcecompanies.com

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Industry Trends

Clayton, Dubilier & Rice (CD&R) to Acquire Cornerstone Building Brands, 

the largest manufacturer of exterior building products in North America, for $5.8 billion in an all-cash transaction. CD&R will pay $24.65 per share for the North Carolina-based company, representing a 16% premium to Cornerstone's closing stock March 4.1

Nonresidential Construction Starts Lead the Construction Surge

Nonresidential building starts increased 32%, are Intel Chip $10 billion fabrication plant, US Steel’s $1.5 billion steel mill and Intel’s $550 million renovations of a semiconductor facility. The nonresidential construction sector is expected to see continued increases in construction starts as the manufacturing sector and the economy slowly recover post-pandemic.2

Residential Housing Starts Climb in February...

despite fears of rising mortgage rates, higher material costs, and supply chain issues. In February, privately-owned housing starts climbed 6.8% to a seasonally adjusted annual rate of 1.769 million, exceeding January’s revised estimate of 1.657 million. Housing starts increased 22.3% above the February 2021 rate of 1.447 million. February housing permits decreased 1.9%; however, they are 7.7% above the February 2021 rate of 1.726 million.3

Construction Employment Surges in February

Virtually all (99.0%) of the jobs lost during the earlier stages of the pandemic were recovered during February. This is a promising sign for the industry that has struggled with labor shortages prior to and during COVID-19. In February, Associated Builders and Contractors (ABC) stated the industry will need to attract 650,000 additional workers to meet the demand for labor.4 5

Lumber Prices Cool, For Now...

after increasing 135% since 2020 and achieving recent highs of $1,357 per thousand board feet due to the current invasion of Ukraine. Lumber has since dropped 20% in March 2022, but Lennar, America’s second largest homebuilder, warned the price might jump back up due to short-term inflation through the spring and summer building cycle. 6

U.S. Steel Corporation Hits Record High 

During Q4 2021, the company reported a year-over-year increase in revenues of 119% due to the higher demand for steel and its rising price per ton. The pricing per ton rose by over 50% for the year-over-year analysis. U.S. Steel is one of the top steel producers in America. The company has indicated that higher steel prices will continue to occur due to the current conflict in Ukraine.7

Largest Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Forterra, Inc.
  • Quikrete Holdings, Inc.
  • $2,817.30
  • Malarkey Roofing Products Co.
  • Holcim Group Services Limited
  • $1,350.00
  • Associated Materials, LLC
  • Strategic Value Partners, LLC
  • $950.00
  • North American Fly Ash Business of Boral Limited
  • Eco Material Technologies Inc
  • $755.00
  • Urban Grid Solar Projects, LLC
  • Brookfield Renewable Corporation
  • $650.00
  • Hanover Family Builders, LLC
  • Landsea Homes of Florida LLC
  • $248.54
  • Reconstruction Experts Inc.
  • Johns Lyng Group Limited
  • $202.00
  • Joule Processing, LLC
  • Plug Power Hydrogen Holdings, Inc.
  • $160.00
  • Granite Inliner, LLC/Granite Transport Co./2626584 Ontario, Inc.
  • Inland Pipe Rehabilitation LLC; 1000097155 Ontario Inc.
  • $159.67
  • Solar Innovations, LLC
  • Fortune Brands Home & Security, Inc.
  • $63.00

Other Financial Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Southwest Slurry Seal, Inc.
  • American Pavement Preservation LLC; Capital Alignment Partners
  • n/a
  • Apple Roofing, LLC
  • Gauge Capital LLC
  • n/a
  • Certified Climate Control, Llc
  • NorthCurrent Partners, LLC
  • n/a

Other Strategic Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Mill Creek Dolomite, LLC
  • United States Lime & Minerals, Inc.
  • $6.40
  • Stay-Lite Lighting Inc
  • Orion Energy Systems, Inc.
  • $4.40
  • Phillips Architecture PA
  • Redline Design Group, P.A.
  • $4.00
  • LarSun LLC
  • Harness Power
  • $2.50

 

Source S&P Capital IQ as of 4/4/2022 and PCE Proprietary Data

PCE Transactions

Contacts

Michael Poole

Orlando Office

407-621-2112 |

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Michael Rosendahl

New York Office

201-444-6280 Ext 1 |

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Data Assumptions

This report represents transaction activity as mergers & acquisitions, consolidations, restructurings and spin-offs. Targets are defined as U.S. Based companies with either foreign or U.S. based buyers. Transaction information provided is based on closed dates only.

Glossary

EBIT - Earnings Before Interest and Taxes
EBITDA - Earnings Before Interest, Taxes, Depreciation, Amortization
LTM - Last Twelve Months
TEV - Total Enterprise Value

Sources:

  1. Cornerstone Building Brands to be Acquired by CD&R for $5.8 billion. (2022, March 7). Clayton, Dubilier & Rice.
  2. Dodge Data & Analytics – Total Construction Starts Increase in February, March 16, 2022.
  3. Carlo, A. (2022, March 17). Housing starts climb in February. HBSDealer.
  4. Construction Employment Surges in February to Near Pre-Pandemic Levels, Says Abc. (2022, March 4). Associated Builders and Contractors.
  5. Construction Industry Faces Workforce Shortage of 650,000 in 2022. (2022, February 23). Associated Builders and Contractors.
  6. “Lumber Prices Have Tumbled Over 20% in March, buy Homebuyers Shouldn’t Celebrate Just Yet,” Will Daniel, Fortune, March 24, 2022.
  7. “US Steel Confident on Rising Steel Costs; Prices Persisting” Alan Sumler, Nasdaq, March 27, 2022.
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