Building Products & Construction Q1 2025

Executive Summary

The Building Products & Construction sector experienced steady M&A activity in Q1 2025, with 708 transactions closed (LTM), reflecting a 20.6% increase from Q1 2024. Strategic buyers led 88.42% of transactions, with interest in prefabrication, engineering services, and regional infrastructure players. Financial sponsors remained active, focusing on HVAC, roofing, and automation platforms. Valuation multiples are leveling out, with TEV/EBITDA at 10.02x and TEV/Revenue at 1.46x, down from 13.29x and 1.70x a year ago. These trends reflect a pivot toward operational resilience, essential services, and supply chain proximity.

Market Dynamics

Valuation multiples compressed YoY as buyers adjusted to tighter monetary conditions and inflationary pressures. Median TEV/EBITDA declined to 10.02x (from 13.29x), while TEV/Revenue held at 1.46x, signaling a flight to quality. Strategic acquirers prioritized regional leaders with scalable models, while private equity focused on consolidating fragmented verticals through bolt-on acquisitions.^{1 3}

Buyer Landscape

Strategic Acquirers: Strategic buyers drove 626 of the 708 tracked deals (87.2%) (3.8% of those were PE Backed strategics), favoring targets in electrical contracting, prefab infrastructure, and distribution. Large-cap acquirers such as Eaton and EMCOR pursued scaled targets with synergistic capabilities.⁸

Financial Buyers: Financial sponsors accounted for 82 transactions (12.8%) concentrating on niche verticals like HVAC, roofing, and consulting engineering. PE-backed buyers like Rotunda Capital and PAX Services deployed capital in support of platform expansion strategies.8

Industry Comparison

Building Products & Construction M&A rose 21% YoY, outperforming other cyclical sectors amid easing interest rate pressure and strong demand for essential infrastructure. Despite a 24% decline in EBITDA multiples from Q1 2024, activity was buoyed by strategic consolidation and private capital availability. Macro headwinds remain, but resilient sub-sectors like prefab and engineering services are attracting premium valuations.^{1 2 7}

Geographic Expansion

Top U.S. States: Florida (80 deals), Texas (67), and California (51) led deal volume, supported by moderately improving housing demand, infrastructure spending, and demographic growth.⁸

Cross-Border Trends: While most buyers were U.S.-based, select cross-border interest—particularly from Canadian and European investors—highlighted the global appeal of American infrastructure and prefab capabilities.^{2 7}

Notable Transactions

Largest Transactions Closed

Other Strategic Buyer Transactions Closed

Other Financial Buyer Transactions Closed

Emerging Trends

Key trends shaping Building Products and Construction M&A:

1. Private Equity’s Continued Expansion
   PE firms are aggressively pursuing both platform and add-on acquisitions across HVAC, specialty contracting, and distribution segments. ^{1 2}
2. Prefab & Modular Construction
   Labor shortages and project delays are accelerating demand for prefabricated solutions, positioning prefab manufacturers like Fibrebond as prime acquisition targets.^{1 2 7}
3. Infrastructure Tech & Automation
   Automation and digitization in construction services (e.g., RMH Systems) are drawing investor interest due to operational efficiency gains.^{1 4}
4. ESG & Energy Efficiency
   Buyers continue to prioritize energy-efficient and LEED-certified contractors to align with sustainability mandates and meet federal/state incentives.^{1 2 3}

Outlook for Next Quarter

Opportunities: Construction spending is forecasted to grow 4.1% in 2025, with engineering expected to lead. Growth will also be supported by increased domestic manufacturing of building materials, driven by U.S. tariffs encouraging local sourcing.^{2 6}

Risks: Labor shortages, inflation in material inputs, and regulatory delays could slow execution timelines on large projects.^{2 4}

Predicted Activity: M&A will remain strong in HVAC, prefab infrastructure, and specialty distribution, with PE firms actively pursuing consolidation strategies.

PCE Transactions

Served as advisor to A-1 Global as they transferred an interest to A-1 Global ESOP Trust

Served as advisor to The Beam Team on their sale to BDS Solutions Group

 

Served as advisor to Modern Plumbing Industries as they became 100% ESOP owned

 

Served as advisor to the trustee of the Dellinger ESOP

Served as advisor to the trustee of the Argent ESOP

 

Served as advisor to Simpson Air on their sale to Del-Air

Served as advisor to Ally Building Solutions on their sale to Astara Capital Partners

Served as advisor to Clune Construction Company on their sale to the Clune Construction Company ESOP Trust

Served as advisor to Midwest Drywall Co., Inc. as they became 100% ESOP Owned

Served as advisor to Del-Air on their $45 million debt financing

Served as advisor to Consolidated Minerals, Inc. on their sale to the CMI ESOP Trust

Served as advisor to MMC Corp on their acquisition of Building Central Services, Inc.

Served as advisor to Williams Electric Co., Inc. on their sale to Parsons

Served as advisor to Energy Air, Inc. on their sale to the Energy Air, Inc. ESOP Trust

Served as advisor to American Builders Supply, Inc. on their acquisition by Bluewolf Capital Partners, LLC

Served as advisor to Tri-City Electrical Contractors as they transferred an interest to Tri-City ESOP Trust

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