Aggregates Industry Update – Q4 2022

In this quarterly report, Griffin Financial Group (or “Griffin”) provides analysis and commentary on capital markets and valuation trends, mergers and acquisitions (or “M&A”), and market research within the aggregates, building products, and construction materials industries. Industry tailwinds coupled with greater funding availability of infrastructure and commercial construction projects has helped offset margin compression from inflationary pressures. These tailwinds have provided strategics with significant pricing power in their respective markets, which has supported price momentum and their ability to incrementally increase material prices to offset inflation. M&A activity has continued at a rapid pace through YTD March 2023 as publicly traded strategics look to divest non-core assets and acquire bolt-on acquisitions with more favorable end market exposure. Below are the key trends in the aggregates industry highlighted in the report:

1. The aggregate industry still has significant tailwinds, despite a weak macroeconomic outlook
2. Unlike broader capital markets, M&A activity and valuation multiples in the aggregates industry held strong through the remainder of 2022
3. Environmental, safety and governance (“ESG”) initiatives continue to play a role in capital markets strategies
4. Cement producers continue to experience robust demand and tight supply amid sold-out conditions
5. Aggregate producers are starting to see some relief from inflationary pressures, but both labor market dynamics and supply chains remain fragile

For more information on Griffin’s scope of advisory services for the aggregates, building products, and construction materials industries, please contact John A. Lee, Head, Commercial, Industrial and Services, at 610.205.6106, or Andrew D. Rudner, Vice President, at 610.205.6102.