Webb Analytics Finds Construction Supply M&A Deals Count Slid 22% in ’23; Number of Facilities Acquired Fell only 2.6%

Deals Report also reveals continued strong demand in opening greenfield locations

WASHINGTON, DC (Feb. 6, 2024) — Pro-oriented, residentially focused construction supply companies saw 22% fewer deals in 2023, but the number of locations acquired declined just 2.6% from the year before, Webb Analytics’ just-released Deals Report for 2023 finds. At the same time, the number of greenfield openings dropped only 5%.

This year’s edition of the consulting company’s annual report counts 140 merger and acquisition transactions last year by 82 entities and involving 479 locations. That compares to 179 deals by 89 buyers for 492 locations in 2022. Meanwhile, there were 242 greenfield store openings in 2023, not far behind 2022’s 255 openings of new stores.

“The desire to consolidate the construction supply industry didn’t wane in 2023,” Webb Analytics President Craig Webb said. “However, the jump in lending rates made it harder for some to finance deals. That’s a likely reason why some of the privately held companies that were active in previous years didn’t announce any purchases until late in 2023. Meanwhile, three of the four busiest acquirers were publicly held companies.”

The Deals Report for 2023 report—available for free at www.webb-analytics.com—covers actions involving the types of companies where a pro would shop. These firms include lumberyards (and their components plants that make trusses, panels, and millwork), roofing stores, drywall specialists, landscaping companies, flooring retailers, home centers, and hardware stores. The report’s covers only actions in the U.S. except when a U.S.-based dealer moves into Canada, as happened a few times in 2023.

SiteOne Landscape Supply did the most deals—11—in 2023, taking in 60 stores. Beacon Building Products and its distribution subsidiary, Dealers Choice, was second with nine deals but only 21 facilities, while roofer ABC Supply and its drywall specialty subsidiary, L&W Supply, was third with eight transactions for 60 locations.

The average transaction in 2023 involved 3.4 locations, up from 2.7 in 2022. That increase largely came because of four deals: L&W Supply’s purchase of 46 locations from US LBM, The Home Depot’s acquisition of the 44-unit International Designs Group, SiteOne’s purchase of 35 Pioneer Landscape Centers, and drywall specialist Foundation Building Materials’ acquisition of Marjam Supply, which has 32 locations.

L&W Supply’s purchase of US LBM’s drywall specialty stores figured mightily in the 106 total gypsum locations that changed hands in 2023. That’s more than any other category. Landscaping came second with 74 facilities in deals, followed by lumberyards at 62.

The roofing, flooring, and hardware/home center categories all had more greenfield openings than stores acquired in deals. “There may be two reasons why,” Webb said. “First, the number of desirable independent gypsum and roofing dealers may be dwindling rapidly. And second, in many cases big dealers have decided it’s easier to plant a store in a new location than to buy out an existing one.”

Florida by far was the busiest state in 2023, with 75 facilties acquired, 22 sites newly opened and just one closure for 98 total actions—one-eighth of all activity. Texas was next at 51, followed by New York at 49 and Georgia at 40.

The Deals Report for 2023 is available as a 24-page PDF document. It can be downloaded for free from www.webb-analytics.com.

Contact: Craig Webb, President, Webb Analytics,

?[email protected] or 202-374-2068

Webb Analytics is a research and consulting firm that helps construction supply companies identify and respond to trends, threats, and opportunities. Founder and President Craig Webb is one of the nation’s leading experts on building material dealers and distributors. He spent 12 years as editor-in-chief of ProSales, at one time the nation’s most honored publication for building material dealers, as well as five years as editor-in-chief of Remodeling magazine.