Industry Update: Building Material Distribution

By: Chris Mellen | Kevin Meyers | Doug Peterson

VRC is proud to release its latest Industry Report, which includes a concise, insightful update on the Building Material Distribution industry including recent transactions, market multiples, company performance and purchase price allocation percentages.

Read the full report: Building Material Distribution: March 2019

March 2019 Industry Highlights

  • The US housing market value has continued its upward trajectory since 2011 as prices and demand remain elevated. Strong demand coupled with historically low new home construction has shrunk the supply of for-sale homes to 3.9 months, down compared to the pre-crisis supply of 4.6 months. 2019 is expected to bring 1.3-1.4 million new units, up slightly from 2018 levels based on Urban Institute’s January 29, 2019, report.
  • Revenue growth has remained below historical levels while EBITDA margins have continued to rise. This revenue growth also falls within expected ranges often associated with distributors.
  • Compared to previous updates, purchase price allocations, based on limited sample sizes, have seen an increase in customer-related values along with goodwill.
  • The low values attributed to acquired trademarks and brands, 2.7% of acquired assets are in the range we often find for distributors.

Past Industry Updates:

Building Material Distribution: July 2017