Building Products & Construction | Q4 2025 | PCE Investment Bankers

Executive Summary

M&A activity in the Building Products and Construction sector gained momentum in Q4 2025 with 787 closed transactions (LTM) compared to 736 in 2024. The market remains resilient as firms prioritize inorganic growth to combat labor shortages and supply chain volatility. Strategic buyers dominated by completing 88.22% of deals while financial buyers focused on high-margin specialty platforms. Valuations shifted as median TEV/EBITDA compressed to 10.18x from 11.02x and TEV/Revenue rose to 1.61x from 1.53x. These figures highlight a market that values top-line stability as an essential hedge against rising input costs. ¹

“We’re seeing building products and construction deal activity increasingly driven by scale and strategic repositioning rather than broad-based expansion,” said Nicole Kiriakopoulos, Director at PCE. “Buyers are prioritizing assets tied to infrastructure exposure, productivity gains, and supply-chain resilience, which continues to support consolidation even as cost and labor pressures persist.”

Market Dynamics

In Q4 2025 sector volume rose to 787 deals as firms sought scale to navigate elevated material prices and tariff pressures. While EBITDA multiples moderated to 10.18x from 11.02x revenue multiples strengthened to 1.61x from 1.53x to reflect a premium on targets with robust infrastructure backlogs. This trend underscores a shift toward defensive consolidation where acquirers favor targets offering geographic density or prefab capabilities to offset persistent labor constraints. ¹

Buyer Landscape

Strategic Acquirers: Strategic buyers led the sector by completing 88.22% of transactions. Acquisitions centered on vertical integration and the capture of skilled labor pools to secure supply chain stability amid ongoing trade uncertainty. ¹

Financial Buyers: Financial buyers accounted for 11.78% of deal volume by targeting fragmented subsectors such as HVAC and specialty distribution. Private equity groups prioritized platform strategies to build regional scale and implement operational efficiencies through digital tools. ¹

Industry Comparison

The US M&A market strengthened into late 2025, with aggregate deal value rising approximately 45% year over year, driven by an environment increasingly concentrated in large, strategic transactions. Within this backdrop, Building Products and Construction demonstrated relative resilience versus other cyclical sectors, supported by infrastructure exposure, energy-efficiency investment, and supply-chain repositioning, as buyers prioritized scale and strategic repositioning over volume expansion. ^{3 6 6}

Geographic Expansion

Top U.S. States: Texas led with 93 transactions followed by Florida with 78 and California with 63 to reflect high demand in regions with significant infrastructure spending. ¹

Cross-Border Trends: Although deal flow remained predominantly centered within the U.S. market international firms increased inbound investment into domestic manufacturing to shorten supply chains and bypass evolving trade barriers. ¹

Notable Transactions

Largest Transactions Closed

Other Financial Buyer Transactions Closed

Other Strategic Buyer Transactions Closed

Emerging Trends

Key trends shaping Building Products and Construction M&A:

1. Vertical Integration and Pro-Channel Dominance
   Building products deal activity continues to be led by scaled strategic buyers pursuing greater control over distribution, customer access, and downstream margin, while competitive pressure has intensified as additional buyer groups re-enter the market.^{2 6}
2. Digital Acceleration and Labor Mitigation
   Labor shortages and cost pressures remain structural challenges, driving acquirers to pursue productivity-enhancing capabilities, including digital design tools, automation, and prefabrication-oriented business models.^{4 6}
3. Strategic Pivot Toward Infrastructure and Supply-Chain Resilience
   Deal rationales increasingly emphasize infrastructure exposure, domestic capacity expansion, and supply-chain resilience as firms respond to policy uncertainty and trade-related risks.⁶
4. Subsector: Specialty Trade Contractors
   Specialty contractors are using consolidation to strengthen more consistent execution amid rising costs and labor shortages across the construction value chain.⁶
5. Subsector: Building Materials
   Large-scale consolidation remains a defining feature of the materials segment, with buyers focused on regional density, pricing discipline, and mitigation of input-cost and tariff-related risks.^{2 6}

Outlook for Next Quarter

Opportunities: Advisors expect continued deal momentum into 2026, supported by improving financing conditions and a higher share of large, strategically driven transactions.^{3 5}

Risks: Persistent labor shortages, cost inflation, and tariff uncertainty remain key constraints that could pressure margins and complicate transaction execution.⁶

Predicted Activity: Near-term activity is expected to remain concentrated among larger, scaled transactions as buyers continue to prioritize strategic repositioning over volume-driven growth.^{3 5}

PCE Transactions

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