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TKO Miller Market Analysis 

  • A strong U.S. economy is expected to contribute to demand for the construction and maintenance of manufacturing structures, fueling industry growth. The industry faces long-term risks, however, including the availability of existing manufacturing space, high interest rates, and higher borrowing costs due to increases in the yield on the 10-year Treasury note. 
  • Government policy is expected to contribute to industry growth, with the federal government agreeing to spend $2 trillion on infrastructure investments over the next ten years. However, political uncertainties going into 2020 and the continued threat of tariffs have the potential to outweigh any gains from federal policy. 
  • Despite the uncertainty generated by an election year, TKO Miller expects seller favorable conditions and buyer appetite to persist in 2020 as construction spending continues to rise due to support from the commercial sector.

Industrial and Construction Services News

Doosan Bobcat, Point of Rental, Reachmaster Take Top Prizes in RER's Innovative Product Awards

Doosan Bobcat’s new MAXControl iOS Remote Control for Bobcat Loaders won the Gold Award for Rental Equipment Register’s 2019 Innovative Product Awards competition. The technology allows earthmoving construction equipment to be operated via remote control on a cell phone. Point of Rental Software and Reachmaster won the silver and bronze awards, respectively. [LINK]

Homebuilders, Lenders are ‘Being More Conservative’ to Prevent Repeat of 2008

There were about 1.66 million homes on the market at the end of November, which the National Association of Realtors says is the lowest on record for the month. Supply is down 5.7% from the year prior. Home construction companies have reduced speculation and lowered risk-taking in an effort to prevent a repeat of the 2008 housing market collapse. [LINK]

New Operating Platform Looks to Bring Disruption to Industrial Construction

The Construction Industry Institute launched a research phase for the new platform, dubbed Operating System 2.0, which aims to deliver a 35% reduction in project costs, 50% reduction in schedule duration, and a 60% improvement in ROI. A consortium of investment partners launched a private entity, PrairieDog Venture Partners, to actualize and deploy OS 2.0. [LINK]

Industrial and Construction Services Valuation Index 

Middle Market Valuation Multiples 

Other Industrial and Construction Services Transactions

Oct. 2019 – J2 Acquisition, a European Special Purpose Acquisition Company (SPAC), Completes Acquisition of APi Group

J2 Acquisition has acquired APi Group, a provider of engineering services for approximately $2.9 billion at an Implied
EV / Revenue multiple of 0.73x. The Company constructs cross-country pipelines, excavation, clearing, hydrostatic testing, steel fabrication and erection, catering to the energy, life safety, and infrastructure sectors. 

Oct. 2019 – Sunbelt Rentals Acquires Allwest Underground

Sunbelt Rentals has acquired Allwest Underground for approximately $10 million (Pitchbook).  Based in Pacific, WA, the company offers various products and services to the construction industry including trench shielding and shoring systems, pipe plugs, job site consulting, and safety training classes.

Nov. 2019 – BrandSafway Acquires Bowline Construction LLC

BrandSafway has acquired Bowline Construction LLC to continue growth and expansion of its commercial motorized access offerings. Founded in 2004, Bowline is a leading provider of commercial construction access systems in the New England region, offering expertise in hoisting.

Dec. 2019 – Applied Felts Acquires Ferratex Services

Applied Felts has acquired Ferratex Services for $32.35 million (Pitchbook). Based in Livingston, NJ, Ferratex Services provides wet-out and related liner equipment, customized solutions, and equipment rental for pipe installation projects.

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