The construction supply industry saw high lending rates and a relative lack of big transactions result in 22% fewer deals involving 2.6% fewer locations in 2023 vs. 2022. There also were 10% fewer buyers, with several big players barely present. But greenfield openings, while down 5% from 2022, remained well above earlier years. Among business sectors, gypsum saw more action than did lumber (plus components) or roofing.
Webb Analytics’ Deals Report 2023 contains more than two dozen maps, charts, and tables. The 24-page PDF reveals the biggest deals and biggest dealmakers. There are breakdowns based on business type and state, as well as commentary on how 2023’s numbers compare with the previous five years. And there’s special attention given to Builders FirstSource, US LBM, SRS Distribution, ABC Supply, Kodiak Building Partners, and Beacon.
The Big Picture
Let’s start with some historical perspective. The Webb Analytics Deals Database counts only construction supply facilities—i.e., locations where a home builder or remodeler would be likely to shop. Among those stores, we’ve seen 3,053 facilities acquired since 2018. Nearly 40% of those acquisitions were lumberyards or components/truss/millwork facilities, while another fifth were gypsum operations. Of the 945 new stores to pop up since 2018, only 20% were lumberyards or components plants while 30% were roofing or siding businesses and 22% were hardware stores or home centers. The closures number likely is much higher than the 354 listed here as most closures don’t get reported.
In 2023, Webb Analytics recorded 774 facilities that changed hands, opened for the first time, or were closed. That’s 6.7% fewer than 2022’s 830 facilities and far behind 2021’s 1,058, the year that Builders FirstSource absorbed BMC.
Which Kinds of Companies Were Purchased?
As a general rule, lumber-centric companies (with the exception of 84 Lumber) tend to buy existing firms rather than open greenfield sites, while flooring and hardware stores are much more likely to build anew. Thus, the general decline in acquisitions most affected the lumber and components categories, which saw a 50% drop from 2022 in the number of facilities acquired. The number of gypsum stores sold shot up five-fold, mainly because what’s usually viewed as a lumber company—US LBM—sold 46 drywall special units to ABC Supply’s L&W Supply. As for roofing, it is seeing both lots of acquisitions and lots of greenfield openings.
Lumberyards and Component Plants
Until US LBM bought Manning Building Supply of Florida’s five yards and three truss plants, Builders FirstSource’s purchase of the five Noltex Truss plants was 2023’s biggest single deal in the lumberyard and components space. US LBM also made the list by selling five Direct Cabinet Sales locations to Express Kitchens.
There were lots of two- and three-unit sales, such as when Bliffert Lumber bought three Chase Lumber and Fuel stores in Wisconsin, Riverhead Building Supply acquired two Lakeville Kitchen & Bath stores in New York, and Nation’s Best Holdings picked up Adams Building Supply’s two lumberyards in Georgia. All told, 28 of the lumberyard and eight of the components acquisitions involved just one location.
The components category includes both millwork and truss plants. BFS bought millwork operations in Alaska and Florida, Foundation Building Materials took over KCI Doors & Hardware of Phoenix, and Windows, Doors & More bought two Island Sash & Door sites in Washington state plus another in Oregon.
To download the complete 2023 Deals Report, visit https://www.webb-analytics.com/2023-lbm-deals-report.
About Webb Analytics
Webb Analytics is a data and research consultancy that helps executives in construction supply spot the trends, threats, and opportunities that matter most. It’s led by Craig Webb, one of the nation’s best-known industry figures and the former editor-in-chief of ProSales, the construction supply industries most honored publication. Aside from the annual deals report, Webb Analytics also produces the Construction Supply 150, consults with dealers, publishes research reports, and speaks at industry events.