The segment of the trillion-dollar construction industry that includes building and maintenance offers opportunities for growth in both residential and nonresidential building construction. Buildings are becoming more intricate as owners and residents expect more from their homes, workplaces and other structures. There are major opportunities for construction and service providers due to the required maintenance of new systems, and the need to upgrade or replace existing systems. This is a great driver of mergers and acquisitions interest and activity in the sector.
Vertical Integration
Another significant driver of M&A in this industry is the need for vertical integration between companies including equipment manufacturers and building technology providers. These businesses seek to grow their service capabilities through the convergence of innovation and traditional mechanical and electrical building services. Target companies that draw the most attention from buyers are often specialty contractors that have proven success in working within the ever-changing technology landscape in the industry. Mechanical, electrical and plumbing companies that are willing to adopt building information modeling, prefabrication capabilities, and data center knowledge are more likely to draw attention from interested acquirers in this sector.
Construction project delivery methods are also a driver of vertical integration and M&A activity. In addition to the traditional design-bid-build delivery method is:
As integrated delivery methods gain popularity across more and more markets, contractors look to M&A to add in-house design services through strategic partnerships that give them a competitive advantage.
Additionally, some companies are taking vertical integration in the building sector to the next level. In order to cut down on time and reduce costs in a building construction project, they are vertically integrating the model of design, material supply, manufacturing, logistics, and assembly.
Technology Solutions
As in most industries, the acquisition of technological solutions is an inevitable driver of M&A in the building and maintenance industry. Technology provides a vehicle for differentiation for companies operating in this sector. Construction technology startups are on the rise, offering new software solutions and innovating the way buildings are constructed.
Bringing all types of new technology in-house is a key competitive advantage for companies in this space. The growing role of technology in the construction sector results in revised strategies for some companies, which impacts acquisition strategies.
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Has the time come for you to take your business to the next level? The M&A experts at Benchmark International are ready to put their global connections to work and get you engaged in a deal that delivers on all of your aspirations.
Americas: Sam Smoot at +1 (813) 898 2350 / Smoot@BenchmarkCorporate.com
Europe: Carl Settle at +44 (0)161 359 4400 / Settle@BenchmarkCorporate.com
Africa: Anthony McCardle at +2721 300 2055 / McCardle@BenchmarkCorporate.com
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Benchmark International’s global offices provide business owners in the middle market and lower middle market with creative, value-maximizing solutions for growing and exiting their businesses. To date, Benchmark International has handled engagements in excess of $6B across various industries worldwide. With decades of global M&A experience, Benchmark International’s deal teams, working from 12 offices across the world, have assisted hundreds of owners with achieving their personal objectives and ensuring the continued growth of their businesses.
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