Building Products & Construction Q2 2025

Executive Summary

M&A in Building Products & Construction stayed buoyant in Q2 2025. LTM deal volume reached 699—up 8.6% versus Q2 2024—while 156 transactions closed during the quarter. Strategics dominated activity (86.2%), but financial sponsors raised their share to 13.8% as dry-powder deployment accelerated. Median TEV/EBITDA inched up to 11.6× and TEV/Revenue to 1.70×, reflecting buyers’ willingness to pay for scale, labor capacity, and resilient end-markets. Electrical, HVAC, and prefab specialists drew premium bids, and seven headline deals exceeded $475 million, underlining healthy appetite for larger, synergy-rich targets.

Market Dynamics

Despite a 3.5% YoY dip in U.S. construction spending through May¹, multiples edged higher as bidders chased contractors positioned for federally funded infrastructure work and energy-transition projects. Strategics sought regional leaders to secure labor and supply-chain proximity, while private equity concentrated on fragmented verticals—HVAC, roofing, and testing—where bolt-ons can quickly expand EBITDA. Prefabrication and modular capacity remain a key diligence theme as owners navigate labor shortages and schedule risk.²

Buyer Landscape

Strategic Acquirers: Strategics executed 563 of 699 deals (86.22%) and 46 (8.2%) were PE-backed—targeting electrical contracting, paving, and metal-building manufacturers to deepen service breadth and geographic reach.

Financial Buyers: Pure-play sponsors closed 90 deals (13.78%), focusing on niche HVAC, roofing, and civil-engineering platforms where operational upgrades can unlock value.³

Industry Comparison

Building Products & Construction accounted for 5.2% of all U.S. M&A in Q2 and 5.0% on an LTM basis, roughly flat YoY. Deal flow in the sector outpaced other cyclical verticals despite tighter credit, underscoring investors’ confidence in infrastructure-linked earnings. While median EBITDA multiples rose 1% QoQ, they remain below 2021 peaks, suggesting disciplined but still-constructive pricing.

Geographic Expansion

Top U.S. States: Florida (71 deals), Texas (69), and California (55) led volume, buoyed by demographic growth, infrastructure spending, and climate-resilient retrofit demand.

Cross-Border Trends: Cross-border interest—highlighted by WSP Global’s $1.78B acquisition of POWER Engineers—shows sustained Canadian appetite for U.S. engineering and prefab assets.

Notable Transactions

Largest Transactions Closed

Other Strategic Buyer Transactions Closed

Other Financial Buyer Transactions Closed

Emerging Trends

Key trends shaping Building Products and Construction M&A:

1. Private-Equity Platform Push
   Sponsors intensify HVAC, roofing, and testing roll-ups to deploy record dry powder efficiently.³
2. Prefab & Modular Adoption
   The U.S. prefab market is projected to top $40B in 2025 and grow ~6% CAGR through 2033², sustaining premium valuations for module manufacturers.
3. Tech-Enabled Construction
   Buyers prize predictive analytics and automation capabilities (e.g., MP Predictive) to mitigate labor shortages and downtime.
4. ESG & Energy Efficiency
   Decarbonization goals elevate demand for electrification and high-performance building-envelope specialists.²

Outlook for Next Quarter

Opportunities: Federal infrastructure outlays and manufacturing-reshoring incentives should lift backlogs for electrical, paving, and engineering contractors.⁴

Risks: Persistent labor constraints, elevated financing costs, and a recent fall in construction spend may delay project starts.¹

Predicted Activity: Expect steady consolidation in HVAC, prefab modules, and specialty distribution, with PE sponsors driving bolt-on velocity and strategics employing “buy-versus-build” to secure talent and capacity.⁵

PCE Transactions

Served as advisor to A-1 Global as they transferred an interest to A-1 Global ESOP Trust

Served as advisor to The Beam Team on their sale to BDS Solutions Group

 

Served as advisor to Modern Plumbing Industries as they became 100% ESOP owned

 

Served as advisor to the trustee of the Dellinger ESOP

Served as advisor to the trustee of the Argent ESOP

 

Served as advisor to Simpson Air on their sale to Del-Air

Served as advisor to Ally Building Solutions on their sale to Astara Capital Partners

Served as advisor to Clune Construction Company on their sale to the Clune Construction Company ESOP Trust

Served as advisor to Midwest Drywall Co., Inc. as they became 100% ESOP Owned

Served as advisor to Del-Air on their $45 million debt financing

Served as advisor to Consolidated Minerals, Inc. on their sale to the CMI ESOP Trust

Served as advisor to MMC Corp on their acquisition of Building Central Services, Inc.

Served as advisor to Williams Electric Co., Inc. on their sale to Parsons

Served as advisor to Energy Air, Inc. on their sale to the Energy Air, Inc. ESOP Trust

Served as advisor to American Builders Supply, Inc. on their acquisition by Bluewolf Capital Partners, LLC

Served as advisor to Tri-City Electrical Contractors as they transferred an interest to Tri-City ESOP Trust

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