Rock Products and Aggregates Industry Update – March 2025

Aggregates Industry M&A Surges in 2024 Amid Easing Macroeconomic Pressures

Capstone’s latest Rock Products Sector Update reports that Aggregates industry merger and acquisition (M&A) activity surged in 2024 amid easing macroeconomic pressures and elevated construction projects in select verticals. Pricing power bolstered margin strength and helped mitigate weakened aggregates demand as residential and commercial construction activity has remained subdued by elevated mortgage and interest rates.

Rock Products sector growth in 2024 was supported by federal funding and increasingly complex technology requirements driving elevated construction activity in aggregates-intensive end markets. Of note, the Infrastructure Investment and Jobs Act (IIJA), Inflation Reduction Act (IRA), and Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act funding accelerated construction spending across the Infrastructure and Manufacturing verticals in 2024. Concurrently, data center construction spending also increased in 2024 alongside increasingly complex technology infrastructure requirements needed to meet rising demand for artificial intelligence (AI). Pricing momentum also supported sector growth in 2024 by bolstering margin strength and insulating sector participants from weak aggregates demand in Residential and Commercial end markets. Easing inflationary cost pressures are expected to further catalyze sector margin strength amid expectations that pricing momentum will continue in 2025. This foundation of pricing power has well positioned rock products providers to benefit from federal funding and AI infrastructure demand driving increased construction activity across the Manufacturing, Infrastructure, and Data Center verticals in 2025.

Aggregates industry M&A momentum continued through year-end in 2024, rising 62.9% year-over-year (YOY) to 145 transactions announced or closed—rebounding from depressed levels seen in 2023. Transaction activity accelerated in 2024 amid healthy construction activity and interest rate cuts in the latter half of the year that pulled private equity buyers off the sidelines. Of note, private equity transactions jumped 90.5% YOY, from 21 deals in 2023 to 40 in 2024. Private equity M&A was led by sponsor-backed buyers with 31 deals, a 106.7% YOY increase and the largest YOY gain seen across all buyer groups. Increased construction activity also supported rising sector M&A activity in 2024, particularly for strategic buyers that bolstered portfolio optimization efforts and divestments through bolt-on transactions. This underpinned increased M&A activity across both public and private strategic buyers, with volumes up 84% and 37.2% YOY, respectively. Sector deal conditions will likely remain attractive as interest rates continue to fall and elevated construction activity persists.

Also included in this report:

• An M&A update and overview of key, large-scale Aggregates deals in 2024.
• A look into public company performance in 2024 featuring key data.
• A breakdown of historical aggregates production and pricing trends in the U.S.

Capstone Partners’ Building Products Investment Banking Team provides M&A, capital formation, and financial advisory services to the owners of middle market businesses in the Rock Products and Aggregates Industry. Our team partners with leading mid-to-large sized businesses that serve growing end-markets.

For more information on the Aggregates Industry Market trends featured in this report or to speak with one of our Building Products M&A Team members about how to grow, value, and/or sell your company, we are here to help. Contact us today.