BUILDING MATERIALS WEBINAR RECAP
How green is my company and how much will this impact my valuation?
There is a lot of discussion in the building sector today about sustainability and the effects of automation. But how does this impact buyers’ acquisition strategies and, most importantly, will it affect the value of your company?
During our webinar on 16 June 2022, our moderator and Oaklins' Building Materials specialist, Brian Livingston, talked to Jason Shingleton, the Group Innovation Director of Genuit plc (formerly known as Polypipe). With a market cap of c.£1 billion, Genuit specializes in the manufacture of plastic piping systems and has made four acquisitions in the last three years. We also talked to David Felts from our office in Atlanta about his view on valuation metrics and the direction they're likely to take in the future. David has specialized in the building sector for the last 35 years and completed many transactions including the recent sale of Steamist to Masco, and Cali Bamboo to Victoria plc.
Sustainability concerns within the built environment sector have changed from being seen as a compliance-led regulatory burden to being core for companies’ strategies within the sector. This has been accompanied by a rapidly accelerating technology uptake across the building materials value chain. We believe these two emerging trends are driving M&A activity, increasing the number of buyers and attracting materially higher valuations.BRIAN LIVINGSTON, BUILDING MATERIALS SPECIALIST, OAKLINS
If you were unable to attend, you can watch the recording below:
New areas opening up
- The focus on data through IoTs and remote monitoring products is changing what we define as building materials
- This is opening up new subsectors and M&A activity in this area remains strong
- Growing government regulation is placing pressure on companies in the industry to focus on their environmental impact
- This trend is also investor-led, with many investors unwilling to acquire companies that are actively harming the environment
- Private equity will now look at building materials companies that they would have previously discounted as long as they have an ESG angle
- Those that focus sustainability will likely widen the buyer pool and attract premium valuations
Brian Livingston leads Oaklins’ building materials team. He is also head of mergers & acquisitions at Oaklins Smith & Williamson, one of Oaklins’ member firms in the UK. He has over 25 years’ experience in advising companies on fundraisings and the buying and selling of owner-managed and entrepreneurial businesses. Brian continuously follows sector developments, publishes newsletters, attends major events and maintains regular contact with the industry's key players.
Notable deals he has advised on include the sale of Modulo Decorative Solutions to CEECAT Capital, the sale of TG Lynes to Grafton, the sale of Euroclad and Eurobond to Kingspan and sale of Motivair Compressors. Brian has also established high-level contacts with the market consolidators, such as Grafton, Wolseley, CRH, Kingspan, SIG and Saint-Gobain, as well as strategic private equity investors active in the sector.
Group Innovation Director at Genuit Group plc
Jason Shingleton is Group Innovation Director at Genuit Group plc where he leads on innovation and sustainability. Jason began his career with Genuit after graduating from Loughborough University, and has served in a number of senior marketing and innovation roles across the group over the past 25 years. Key strategic themes for Genuit Group are climate and water management, digital integration and decarbonization.
David Felts is a managing director at Oaklins TM Capital in Atlanta. For over 35 years, he has developed a significant practice in representing many well-respected middle-market private equity firms regarding portfolio company divestitures. He has been a frequent panel speaker at middle-market M&A and relevant industry conferences. While David primarily focuses on sell-side M&A and equity recapitalizations, he has a track record of success working in lender-driven situations and in debt transactions. His sector experience spans consumer, building products, distribution, industrials and business services, with particular expertise in equipment rental and dealers, outsourced facilities services, outdoor and consumer-driven building products, home and technical textiles, marine products, and asset protection products and services.
Recent transactions include: the sale of residential steam shower provider Steamist to Masco, the cross-border sale of omnichannel flooring business Cali Bamboo to Victoria plc, the sale of Parterre commercial flooring to AHF Products, the sale of a PE-backed residential shutter & cabinet components supplier to a sponsor, the sale of an installed outdoor architectural products company to a sponsor, and multiple acquisition financings supporting a door, window and bath remodeler; the cross-border recapitalization of cash cycle services company Cennox plc with York Capital, and the subsequent sale of PE -backed commercial safe and service company FireKing to Cennox; the sales of rental equipment companies Norris Sales to United Rentals, Pride Equipment to Ashtead/Sunbelt, and Buckner Heavylift to Markel Ventures and assisting a sponsor in the carveout of a large rental business from an equipment dealer; the sale of PE-owned US and PE-owned Canadian commercial security hardware distributors to a US sponsor and a Canadian sponsor, respectively; the sale of PE-backed fire and life safety services provider Summit Companies to a sponsor, and the sale of a PE-backed outsourced asphalt maintenance service company to a sponsor-backed portfolio company; the sale of a PE-backed Culligan water filtration dealer network to Culligan; and the sales of three home textile producers: PE-backed Spencer Home (decorative pillows) to PE-backed Surefit, PE-backed Berkshire Blanket (fleece blankets) to China-based SUMEC, and Roc-Lon to Chinatex.