In further positive news for the sector, Noble Francis, Economics Director at the Construction Products Association, has revised up his forecasts for the growth over the next four years. Mr Francis believes that improvements in the private housing and infrastructure markets will result in the construction industry growing from £111bn this year to £132bn by 2017, or 19% over four years.
We believe the construction sector will see increasing levels of M&A activity over the next 12-24 months, on both the products and services sides, as strategic buyers and financial sponsors look to take advantage of this upturn. Listed companies in the sector have seen valuations increase on the back of expectations of improved future earnings, which will facilitate an increase in M&A transactions. Other recent deals such as the £230m acquisition of Ideal Stelrad by Bregal Capital have also highlighted increased interest from private equity in the sector.
From a Livingstone perspective, we recently advised the shareholders of IronmongeryDirect on a very successful disposal to French group Manutan, having worked with the shareholders and management since 2010 to help prepare the business for sale. Wherever possible, we like to build long-term relationships with our clients and assist them through their journey to maximise shareholder value.