FMI Releases Construction Materials Outlook – Capturing the Momentum: Construction Materials Review of 2020 and Outlook for M&A in 2021
FMI Capital Advisors, a leading investment banking services firm serving the construction materials sector, is pleased to announce the release of its latest research report, Capturing the Momentum: Construction Materials Review of 2020 and Outlook for M&A in 2021. In this article, George Reddin and Scott Duncan analyze the key economic factors that affected the 2020 Construction Materials (CM) market and discuss the future implications for 2021.
George Reddin, Managing Director of FMI’s Construction Materials group, says, “Throughout 2020, market sentiment operated like a pendulum, swinging back and forth between certainty and uncertainty. By the end of the year, optimism, earnings, and M&A activity all began picking up, allowing the CM industry to finish strong. FMI expects this trend to continue into 2021, driven by new potential for funding, vaccine progress, and a surprisingly robust residential market.”
Key findings include:
- Beyond the global health crisis, 2020 was already set to be a pivotal year for CM, as federal infrastructure funding was in the spotlight with the Fixing America’s Surface Transportation (FAST) Act set to expire in September.
- In the first half of 2020, questions and uncertainty created an anemic M&A market for CM. As the year progressed, activity picked up momentum — ultimately ending with a strong fourth quarter.
- Many buyers started the year with well-structured balance sheets and access to low-interest debt. Election results are signaling the anticipation of new federal infrastructure funding, with CM operators poised to benefit. Public companies in the sector are seeing boosts in their stock values, encouraging an acquisitive atmosphere.
- The promise of capturing future earnings through solid economic fundamentals creates an attractive landscape for Construction Materials M&A. FMI is bullish on the current market for both buyers and sellers.
About FMI Capital Advisors
FMI Capital Advisors, a subsidiary of FMI Corporation, is a leading investment banking firm dedicated to the built environment. With more than 750 completed M&A transactions, our industry focus enables us to maximize value for our clients through our deep market knowledge, strong technical expertise, and an unparalleled network of industry relationships.
FMI Capital Advisors’ Construction Materials team specializes in sell-side mergers and acquisitions for the construction materials industry, including crushed stone, sand, gravel, hot mix asphalt, and ready mixed concrete.
For more information, visit FMI Capital Advisors.
