Quikrete cements a $9.2B megamerger as construction companies vie for federal cash
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Laying the foundation… Construction companies are building up to capitalize on big contracts. Quikrete, one of the largest manufacturers of packaged concrete, yesterday announced plans to buy rival Summit Materials for $9.2B. The combo would create a construction-material colossus and shore up Quikrete’s ability to make the most of an expected building boom as inflation cools and rates drop. It’s the latest in a string of construction consolidation.
Scaffolding scoops: This month, pipes and lumber distributor QXO is said to have made an offer for Beacon Roofing Supply. Earlier this year, door and window maker Miter Brands bought window rival PGT for $3B+.
Hard hats: August saw the largest monthly jump in construction-job openings on record at 60%.
It’s a good time to be a hammer… It's a bull run for bulldozers, fueled by Uncle Sam’s dollars. US factory construction is at its highest level in a half century thanks to federal spending. Major Biden admin packages like the Chips Act and the Infrastructure Law have supercharged building activity. In September, infrastructure spending on transportation projects like railroads grew 7% from last year and manufacturing construction spend hit $235B, a 20% surge. Residential construction ain’t too shabby either. Analysts anticipate spending on new kitchens, decks, and other remodeling to pick up next year.
Incentives cement growth… Federal dollars, like the $39B in manufacturing incentives included in the Chips Act, have kept the wrenches cranking despite rising construction costs. That has companies like Quikrete spending billions to acquire rivals rather than competing for contracts in the hot market.