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Nicole Kiriakopoulos

E: nicolek@pcecompanies.com

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Industry Trends

Private Construction Slows Amid Economic Pressures

Public construction projects drove growth in Q2 2024, with year-to-date construction starts up 11%, thanks to sectors like healthcare and transportation. Private construction lagged, with high interest rates impacting the market. Residential construction saw single-family starts rise 29%, while multifamily declined by 5%. Significant projects include the $3.7B UC Davis hospital and the $10.5B Port Arthur LNG plant. This trend looks to continue in the back half of 2024.1

Economic Growth in Construction Sector Despite Multifamily Challenges

In Q2 2024, North America’s construction industry showed significant growth, with annual spending expected to increase by 5%. Key areas such as manufacturing, lodging, public safety, and transportation saw double-digit growth. However, the multifamily and commercial sectors face a tougher outlook, highlighting the uneven growth within the industry. The sector's success is driven by ongoing investments and new technologies.2

Construction Material Prices Stabilize Amid Global Challenges

Gordian's Q2 2024 Quarterly Construction Cost Insights Report shows construction material prices are stabilizing despite global challenges. While geopolitical tensions, logistics disruptions, and increased demand continue to influence the market, prices for many commodities are leveling off. Copper prices dropped 10.83% since Q1, fiberglass insulation prices remain stable, and concrete block prices increased by 5.80%. Lumber is in line with 2023 so far, leveling out from the pandemic highs seen in 2021 and 2022.3

US Homebuilders Show Cautious Optimism in Stabilizing Market Conditions

US homebuilders are cautiously optimistic as the market stabilized following a period of declining housing starts and eroding backlogs due to interest rate hikes. Tight lending conditions for development loans are also causing a drop in multifamily starts. The National Association of Home Builders (NAHB) forecasts a slight decrease in total housing starts for the rest of 2024, but anticipates a rebound in single-family starts beginning in 2025.4 5

Largest Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Westinghouse Electric Company LLC
  • Brookfield Corporation; Cameco Corporation; Brookfield Renewable Partners L.P.
  • $8,300.00
  • M.D.C. Holdings, Inc.
  • SH Residential Holdings, LLC
  • $6,635.36
  • Masonite International Corporation
  • Owens Corning
  • $4,252.38
  • Argos North America Corp.
  • Summit Materials, Inc.
  • $4,039.70
  • PGT Innovations, Inc.
  • MITER Brands
  • $3,196.88
  • Martin Marietta South Texas Cement, LLC/Martin Marietta's South Texas ready-mix concrete operations
  • CRH Americas Materials, Inc.
  • $2,100.00
  • 20 Active Aggregates Operations in Alabama, South Carolina, South Florida, Tennessee, and Virginia
  • Martin Marietta Materials, Inc.
  • $2,050.00
  • Yak Access, LLC
  • United Rentals, Inc.
  • $1,150.00
  • Regional Enterprises LLC
  • Champion Home Builders, Inc.; Champion Retail Housing, Inc.
  • $478.00
  • Roofing Corp. of America, Inc.
  • FirstService Corporation
  • $467.06

Other Financial Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • LaGuardia Gateway Partners, LLC
  • Meridiam Infrastructure Finance S.a.r.l.
  • $58.00
  • Pave America, LLC
  • PNC Mezzanine Management Corp
  • n/a
  • Laux Construction, LLC
  • Rival Holdings, Inc.
  • n/a
  • Quality Plumbing & Mechanical LLC
  • CopperPoint
  • n/a
  • TriplePoint MEP Holdings, LLC
  • Stellex Capital Management LLC
  • n/a
  • CNS Microwave, LLC
  • Everest Infrastructure Partners, Inc.
  • n/a
  • Renuity, LLC
  • Greenbriar Equity Group, L.P.
  • n/a
  • J3 Construction, Inc.
  • Angeles Equity Partners, LLC
  • n/a
  • Quality First Home Improvement, Inc.
  • Hudson Glade LLC
  • n/a
  • Verdantas LLC
  • Sterling Investment Partners Advisors, LLC
  • n/a

Other Strategic Buyer Transactions Closed

  • Target
  • Buyer
  • Value($mm)
  • Blueridge Transportation Group, LLC
  • ACS Infrastructure Development, Inc.
  • $410.70
  • Summit Industrial Construction, LLC
  • Comfort Systems USA, Inc.
  • $359.83
  • Signature Systems Group, LLC
  • Myers Industries, Inc.
  • $348.90
  • Certain West Coast Cement Operations of Martin Marietta Materials, Inc.
  • UNACEM Corp S.A.A.
  • $317.00
  • Bradley Corporation
  • Watts Regulator Company
  • $303.00
  • BMC Enterprises, Inc.
  • Breedon Group plc
  • $300.50
  • Fleetwood Aluminum Products, Inc.
  • Masonite Corporation
  • $285.00
  • Memphis Stone & Gravel Company/Lehman-Roberts Company
  • Granite Construction Incorporated
  • $278.00
  • Antares Homes, Ltd.
  • Landsea Homes Corporation
  • $242.60
  • certain assets and assumed certain liabilities of Crescent Ventures, LLC
  • Dream Finders Holdings LLC
  • $185.00

 

Source S&P Capital IQ as of 7/9/2024 and PCE Proprietary Data

PCE Transactions

Contacts

Nicole Kiriakopoulos

Chicago Office

224-520-1068 |

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Michael Poole

Orlando Office

407-621-2112 |

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Will Stewart

Orlando Office

407-621-2124 |

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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. 1. Zevin, A., “2Q 2024 Cost Report: Private Construction Struggles in Second Quarter.” ENR, June 27, 2024.
  2. 2. Bowman, J., “2024 North American Engineering and Construction Overview: Second Quarter.” FMI, April, 2024.
  3. 3. Gordian, “Despite challenges, 2024 construction material prices continue to stabilize.” BDC Network, May 31, 2024.
  4. 4. “Building and Construction Industry Outlook Q2 2024.” Ducker Carlisle, April 1, 2024.
  5. 5. Salmonsen, M. “The top 10 residential builders of 2024.” Construction Dive, May 29, 2024.
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