Rock Products – October 2021

Healthy M&A Market Continues for Aggregates Players

Capstone Partners released its October 2021 Rock Products Industry Update reporting that robust activity in the Aggregates industry has been fueled by strengthening state and local budgets, healthy residential and nonresidential construction demand, and the prospect of a sizeable federal infrastructure bill.

Merger and acquisition (M&A) activity in the Aggregates industry has surged through year-to-date (YTD) 2021 with transaction volume rising by 33% year-over-year (YOY). The prospect of capital gains tax increases has driven many owners to expedite their exit timeline to maximize take home proceeds. However, underlying market fundamentals have also fueled a historic M&A environment as low-cost access to capital, elevated EBITDA purchase multiples, and strong cash flows among leading public companies have encouraged a wave of transaction activity.

Also included in this report:

• How leading public aggregates companies have performed in equity markets
• Commentary on the M&A valuation environment
• How aggregates production and pricing have compared to levels in 2020 and the prior quarter