Our Terms & Conditions | Our Privacy Policy
It’s no secret that mergers and acquisitions are transforming the building materials landscape.
Whether you’re looking to sell, buy or just overall optimize your operation, Joe Wagner, a managing director with PMCF Investment Banking, has plenty of expertise to share. He has nearly 25 years of investment banking experience advising his clients on buy side and sell side M&A advisory, shareholder recapitalizations, leveraged and management buyouts, and the private placement of senior and subordinated debt.
Read on for a Q&A with Wagner below.
Q: How would you assess the current landscape for M&A in the building materials world, and what do you foresee for the rest of 2025?
Wagner: After a pullback in 2023–2024 driven by interest rate hikes and construction slowdowns, deal activity is recovering.
The building materials sector remains highly fragmented, offering ample opportunity for consolidation, especially attractive to private equity groups. With housing affordability at historic lows, many homeowners are opting to stay put, driving increased spending on renovations and upgrades rather than moving. This shift supports sustained demand in the residential repair and remodel market, where we’ve seen PE groups actively building out platform investments.
They’re targeting businesses that can expand product lines, customer bases, or geographic reach, capitalizing on long-term housing trends. The sector’s fragmentation and resilience make it ideal for buy-and-build strategies, even in a cautious economic climate.
Q: What are the big trends shaping M&A currently, and which trends will shape M&A moving forward the next few years?
Wagner: Currently, M&A in the building products sector is being driven by strategic buyers looking for scale and supply chain control, and by private equity firms executing buy-and-build strategies in fragmented sub-sectors.
Valuations remain disciplined, but quality assets, particularly those with exposure to repair & remodel, strong margins and diversified revenue streams, continue to command premiums. Looking ahead, the potential for interest rate cuts could ease financing constraints and accelerate deal flow. At the same time, private equity firms have record levels of dry powder and are under pressure to deploy capital, which will likely drive increased activity, particularly in residential-focused platforms.
This combination of capital availability and favorable housing dynamics positions the sector for continued M&A momentum over the next few years.
Q: What tips can you offer folks on succession planning?
Wagner: For business owners in the building products sector, effective succession planning is crucial to maximizing value and achieving a smooth exit.
Start early, ideally years in advance, to develop leadership, formalize operations and reduce dependency on the owner. Understanding how the market will value a business is important, and reviewing market benchmarks and how buyers assess risk can help set appropriate expectations.
Selecting the right investment banker to bring your business to market is also vital. The right advisor can position your company effectively, run a competitive process and help navigate complex deal dynamics.
Finally, understand that a sale is a process, not an event, and it involves preparation, diligence, negotiation and transition planning, all of which require time and focus.
Q: How can building products companies maximize their value in such an uncertain economic landscape?
Wagner: Building products companies can maximize their value by actively minimizing perceived risks that could deter potential buyers.
Diversifying supplier relationships helps avoid disruptions, while selling into multiple end markets can cushion against sector-specific downturns. A broad and balanced customer base reduces reliance on any single account, signaling stability and resilience. Buyers are more likely to pay a premium for businesses that demonstrate consistent performance, adaptability and reduced vulnerability to economic swings.
Q: What specific business upgrades are usually worth investment, and which ones typically not so much?
Wagner: Investments that streamline operations and improve visibility, such as ERP systems, inventory management tools, and CRM platforms, can be well worth the investment, especially in the eyes of buyers who value operational efficiency and data transparency.
Hiring or elevating key roles like a controller, head of operations, or sales manager can also reduce owner dependency and demonstrate depth in leadership. On the other hand, large discretionary spending, or major facility upgrades right before a sale often don’t yield a meaningful ROI unless they directly impact financial performance. Buyers typically prefer to make cosmetic or strategic changes themselves post-close, so sellers should focus investments on what enhances visibility, scalability and profitability.
Q: Can you share a bit about how a company can determine its position relative to its competitors?
Wagner: To understand how it’s positioned relative to competitors, a company should start by benchmarking key financial metrics, like revenue growth, EBITDA margins, customer concentration, and working capital efficiency, against industry peers.
Gathering market intelligence through industry reports, customer feedback and input from suppliers can also shed light on perceived strengths and weaknesses.
Additionally, understanding where the company stands in terms of geographic reach, product mix and operational sophistication helps identify both competitive advantages and gaps to address in advance of a sale process.
Q: What’re some tips to identify potential buyers/investors based on a company’s attributes and owner objectives?
Wagner: Identifying the right buyers starts with aligning your company’s key attributes, such as customer base, growth profile, and operational strengths, with your transaction goals, whether that’s a full exit, partial liquidity, or a growth partnership.
For example, a building products company with strong contractor relationships may attract private equity firms with existing platforms in roofing, while a company offering a unique value-added service may appeal more to strategic acquirers seeking to expand its product offering. Understanding how buyers value characteristics like recurring revenue, customer diversification, or niche product offerings helps narrow the field to those most likely to see strategic fit and pay a premium. A focused, informed approach ensures the buyer pool aligns not only with the business’s strengths but also with the owner’s long-term objectives.
Images are for reference only.Images and contents gathered automatic from google or 3rd party sources.All rights on the images and contents are with their legal original owners.
Aggregated From –
Comments are closed.