Recently, a combination of low inventory and excess demand has led to a huge boom in new home construction. Private equity firms, such as Clearlake Capital and Rotunda Capital Partners, have picked up on this trend and are looking to capitalize through recent deals in the construction and building products industries. In a recent Mergers & Acquisitions article, Clearlake Capital co-founder Jose Feliciano said, “The U.S. housing market is expected to experience robust, sustained activity over the coming years, as the industry plays catch up to address a housing shortage after years of under-investment.”
While M&A interest in the industry is strong, the industry itself has recently faced some struggles as there has been a shortage in labor and drastically increasing commodity prices. James Rothenberg of Meridian Capital said, “Significant increases in the price for lumber, steel, glass, or wages has not been a “deal killer,” they have only been an area of increased due diligence and at times used to achieve small adjustments to final purchase prices. For the remainder of 2021, and at least the first half of 2022, we expect the M&A market for construction, engineering and building products companies to continue at a blazing pace.”
Read the full article here: https://www.themiddlemarket.com/news-analysis/robust-housing-market-spurs-pe-backed-construction-deals
