Building & Construction

Q1 of 2023 saw 28 deals. This represents an 11% decrease from the previous quarter which saw 31 deals. Except for the notable pandemic-related trough in Q2 2020, deal activity has remained relatively stable in recent times. Key deals in Q1 2023 include: 

• The acquisition by the STARK Group, via it’s financial sponsor CVC, of builder's merchants Jewsonsand other Saint-Gobain brands through a £740m leveraged buyout
• The acquisition of Hawkins Electrical by RSK Group and supported by BGF, for an undisclosed amount.

Deals activity in this sector is largely driven by wider economic factors, including consumer and business confidence. A contraction in construction output has seen some businesses seek to consolidate to improve their balance sheet and pipeline of upcoming projects. Regulatory changes, such as the Building Safety Act, are expected to increase costs both for new businesses and the remediation of substandard existing developments.

Restructuring activity  has remained very high over the last year. The reasons for this are largely attributed to macroeconomic factors causing inflation in raw material costs which cannot be passed in full to the end customer, with the material price index for ‘all work’ increasing by 10.4% in January 2023.