In 2022, the number of U.S. and Canadian building supply facilities involved in acquisitions fell 44% from the previous year — from 787 to just 440, according to a new report from Webb Analytics.
But while the number of individual facilities involved in M&A deals plummeted year-over-year, the total amount of deals involving building supply facilities dropped from just 178 in 2021 to 164 in 2022. The reason? In 2022, there were fewer locations per acquisition, just 2.7 per deal in 2022 compared with 4.4 in 2021, according to the report. (There were 7.6 locations per deal in 2020, a year that saw 674 facilities involved in acquisitions, with just 89 deals.)
According to the report, 250 facilities opened in 2022, while 72 closed. The closure rate was down slightly from the 75 closings reported in 2021, and last year’s opening pace topped the 184 openings from 2021, according to the report. In all, 762 construction/building supply facilities either changed hands, opened for the first time, or closed in 2022, according to the report. That number was down 27% from 2021, when 1,046 facilities were involved in deals, openings or closures.
Lumber companies were the most likely to be involved in acquisitions in 2022; those facilities were involved in 121 acquisitions, along with 22 openings and 16 closures. Landscaping facilities facilities were involved in 74 acquisitions in 2022, while hardware/homecare companies (67) and roofing locations (52) also were involved in relatively higher numbers of acquisitions, according to the report. Hardware/homecare facilities reported the most openings (68), the most closures (49) and the most overall activity (184).
In 2022, 11 companies accounted for nearly half of all M&A deals involving construction materials facilities. Roswell, Georgia-based SiteOne Landscape Supply secured the most deals with 15, while Rochester, Minnesota-based Outdoor Living Supply came in second with 11 deals. However, Buffalo Grove, Illinois-based US LBM acquired 46 locations across just six deals, accounting for a 10.5% share of all facilities acquired in 2022, according to the report. SiteOne, ABC Supply/L&W Supply, SRS Distribution and Builders FirstSource all acquired at least 30 facilities during the year.
Craig Webb, President of Webb Analytics, will moderate a panel discussion on new M&A market drivers for construction supply during MDM’s 2023 Virtual M&A Summit, scheduled for Feb. 22-23. The 45-minute session begins at 10:05 a.m. ET on Feb. 23, and will include Steve Swinney, CEO and Founder of Kodiak Building Partners; Jim Hooper, Senior Vice President of M&A at US LBM; and Michael Turner, Partner at The JIAN Group.