Sunbelt Rentals, an equipment rental provider for commercial, industrial, residential, and municipal industries, has acquired Big Sky Rents & Events Inc., a general tool rental business headquartered in Kalispell, MT. In June 2022, Big Sky was recognized as one of the fastest growing rental companies in North America with reported growth of 121.4 percent from 2019 to 2021. In November 2021, the company moved into an impressive new facility in southern Kalispell custom built for Big Sky, which will be rebranded as Sunbelt.

Rental Equipment Investment Corp., a portfolio company of Kinderhook Industries, has acquired Industrial Drying Solutions LLC, a subsidiary of Power Rental Solutions LLC. Founded in 2020 and Headquartered in Franklin Park, IL, Industrial Drying Solutions is a provider of specialty rental equipment, including heating, dehumidification, and power solutions. The company has four locations. The acquisition provides Rental Equipment Investment Corp. substantial growth in their specialty rental division and enables the company to expand their geographic footprint and broaden their equipment offering.

Silver Oak Services Partners, a lower middle-market private equity firm based in Evanston, IL, has made an investment in Vecta Environmental Services, a diversified provider of mission-critical in-plant industrial services. Founded in 2011, Vecta provides hydroblasting, tank cleaning, chemical cleaning, hydroexcavation services, and industrial insulation and scaffolding services. Headquartered in Gonzales, LA, Vecta operates eight locations throughout the Gulf Coast and Southeast U.S. servicing industrial, utility, chemical, and midstream & downstream energy customers.

Best Line Equipment, a leading equipment dealer and general rental, sales, service, and parts provider to the construction and industrial industries, has acquired Chesapeake Supply & Equipment Co., Mid-Atlantic’s single source provider of construction equipment and supplies. This acquisition allows Best Line to serve its long-term strategic goal of stability first and growth second. This acquisition also marks Best Line Equipment’s 14th equipment location in three different states and its first in the Baltimore / Washington D.C. market.

Industrial and Construction Services Public Valuation Index 

Middle Market Valuation Multiples 

Industrial and Construction Services News

Backlog Ticks Up, Remains Historically Elevated

Construction backlog increased 0.2 months to 9.2 months in February despite concerns around financing, according to Associated Builders and Contractors. The backlog reading regained its 0.2-month loss from January and has hovered around highs for the past four months not seen since the start of the pandemic, according to the report. Although backlog remains at a historically elevated level, borrowing costs will continue to rise during the next several months, and contractors continue to struggle in the face of skilled labor shortages. [LINK]

Manufacturing Remains Lone Bright Spot for Construction Spending

National nonresidential construction spending increased 0.4% in February to a seasonally adjusted annualized basis of $982.2 billion according to an Associated Builders and Contractors analysis. Manufacturing projects predominantly accounted for the increase; spending in the other 15 nonresidential segments collectively declined in February. The nonresidential sector’s momentum is attributable to manufacturing-related construction, which accounted for nearly 35% of the year-over-year growth in spending. [LINK]

Recent Bank Failures Cause Uncertainty for Contractors

Pressure on America’s banks is fueling uncertainty in financial markets, causing concerns of a spillover to overall construction activity. After the recent closures of Silicon Valley Bank and Signature Bank, questions surfaced about how those collapses could impact the construction industry. Nonresidential construction activity this year has remained at high levels despite elevated construction and borrowing costs, according to an Associated Builders and Contractors analysis. However, contractors can expect tightening and some tension from small and regional banks. [LINK]

Construction Employment Increases in 45 States

Construction employment increased in 45 states in February compared with a year ago, according to analysis of federal employment data by the Associated General Contractors of America. Texas saw the largest number of jobs added, increasing by 37,900, or 5%, from February 2022 to February 2023. West Virginia saw the largest drop, losing 2,200 jobs, or 6.5%, over that time period. From January to February, construction employment increased in 24 states, held steady in six and declined in 20 and Washington, D.C. The Department of Labor has recently announced initiatives to train and employ women and minorities — underrepresented groups in construction — so that they can find a strong career path and fill the gap in demand. The agency hopes the Infrastructure Investment and Jobs Act will create an opportunity for workers seeking good-paying jobs, who then realize their future in construction. [LINK]

Manufacturers Raise the Bar on Safety to a Higher Standard

Improvements in safety have come about because participants at every level are contributing. The recent ANSI standards that have improved safety procedures were very much motivated by manufacturer involvement. Rental companies have made safety a much greater priority than ever before. Rental companies are far more diligent in making sure customers are thoroughly trained and ANSI standards require them to do site assessments and improve training and customer familiarization. [LINK]