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Consolidation activity in the roofing contractor sector continued in 2025, with both strategic and financial buyers doing deals over the past 12 months. With distribution and manufacturing operations hampered by uncertain tariff policy and increasing consolidation (see The Home Depot acquiring distributor SRS), private equity has kept its attention squarely focused on the services/contractor sector.

Prior years’ deal activity focused primarily on residential self-pay businesses, and while this continues, many platforms have reached a point where they are focused on integration and acquisitions that fill a key need (geography, management talent, etc.). Coupled with a slowdown in self-pay demand, we have seen an uptick in interest for businesses with more commercial or insurance exposure.

As a trusted advisor to owners and executives in the Roofing & Exterior Contractor space, Anchor Peabody leverages its unmatched industry knowledge and M&A expertise to achieve best-in-class outcomes for founders and owners. We welcome a confidential conversation to discuss your options and strategy in this rapidly consolidating market.

• Residential self-pay business stagnates, capital re-deployed to commercial. Residential retail roofing has been the star of the industry for the past half-decade and has attracted outsized investment and consolidation activity. However, 2025 saw demand slow as many homeowners undertook replacement projects earlier in the cycle, and low consumer confidence and high interest rates took their toll.In response, many residential retail roofing platforms took some time this year to focus on integration and talent acquisition, rather than growth through M&A. New investment has shifted to flow more towards commercial platforms, which struggled less in 2025 than their residential cousins. Businesses with a high volume of repair and maintenance work have attracted the most attention, with companies like Tecta America continuing on the acquisition path (see acquisition of Alpine Roofing).
• Insurance market – focus on hail belt and diversification. The drop in self-pay activity has led some investors to re-evaluate the insurance market. Guage Capital’s Apple Roofing has performed well in the Midwest, buoyed by consistent hail activity, and Bertram Capital’s Ridgeline roofing has similarly held ground. Investors in this market are generally focused on businesses that have excellent relationships with insurance carriers and at least some portion of retail business that can serve as a hedge to potentially volatile residential work.
• Renovo bankruptcy puts demand dynamics in the spotlight. In early November 2025, reports surfaced that former Audax portfolio company Renovo was entering Chapter 7 bankruptcy with plans to liquidate the operations. Renovo was founded in 2022 as a roll-up of home improvement contractors across the nation (see New York Times article here in which Anchor Peabody is quoted). Sluggish demand driven by high financing costs and limited existing home sales, along with high debt-levels from the acquisition and subsequent add-ons, ultimately sunk the company, which by early 2025 was turned over to its debtholders. Renovo’s focus on higher cost, deferable projects made it especially sensitive to fluctuations in consumer sentiment and demand. We don’t believe this is a bellwether for the overall roofing industry, but it is a data point that suggests consumers are not yet willing to undertake expensive “nice-to-have” projects and will instead focus on those expenditures that are difficult to live without (roofing, HVAC, electrical, plumbing)
• Keep an eye out for upstream consolidation. The Home Depot’s acquisition of SRS put one of the largest roofing materials distributors in the hands of a building products behemoth. We expect competitor Lowe’s to pursue similar acquisitions, with ABC Supply being the most logical target. QXO acquired Beacon earlier in the year as it aims to consolidate a number of building products distribution markets. Scale matters when it comes to distribution, especially in terms of logistics, facility rationalizations and manufacturer rebates. As distributors grow and consolidate, smaller contractors could see themselves squeezed on pricing, margins and rebates. QXO has publicly said they plan to double distribution margins, and we expect pricing and rebates to smaller customers to drive a sizeable portion of that strategy. Contractors will look to get bigger to counter the leverage of increasingly larger, more consolidated distribution partners.
• Buyers are looking to put money to work. Private equity investors have largely avoided distribution this year as tariffs and supply chain concerns make forecasting difficult. Many have turned more attention to service providers, especially those with diversified end-markets and customer bases. There is no shortage of capital available and despite some macro-economic uncertainty, investors continue to look to put money to work win businesses with a proven track record, defensible market share, and talented management teams. Any indication of a pick-up in activity in the first half of 2026 will likely lead to another buying spree in the industry, with more focus on commercial and diversified operations.
• Advice for potential sellers. The M&A market for roofers remains open and active, and while velocity has retreated, the current timing in the cycle and macroeconomic indicators suggest that 2026 will be a good year for independents to explore M&A.Earlier in the cycle, many acquirers were focused on pure-play acquisitions – focusing on businesses that were 80%+ in the market of their platform (residential re-roof, commercial maintenance, etc.), leaving more diversified businesses largely on the sidelines. As these platforms become more mature and owners wrap their hands around a single subsector, they will likely be more open to diversification plays. This will create a more robust market for independent roofers who split their time between commercial and residential end markets.

Potential sellers should continue to focus on things that will drive value and certainty of close. This includes a) Customer and end-market diversification if the current business is highly concentrated in one market; b) Strengthening the organization and back office and ensuring the business has a strong team of leaders in sales, finance and accounting, and marketing; c) Considering deployment of software and systems that can help across the business in both marketing and operations (e.g., CRM systems, job tracking, KPI monitoring, etc.).

• Preparation remains paramount. It takes approximately 6 months from start to finish to complete a private sale in the industry, but at Anchor Peabody our work often starts much earlier. The more preparation time, the better the outcome. Understanding the company strategy, the management team and bench, the strength of the finance and accounting team, the growth plan and its defensibility are all key to achieving a successful transaction. We work with potential sellers months and sometimes years before they ultimately plan to go to market.

International Roof Expo 2026 – Las Vegas: If you are in roofing and exteriors business, we’d love to see you at IRE 2026 in Las Vegas in January. If you’re interested in an on or off-site meeting, please reach out to me at [email protected] or call at 917.520.2256

This article was first published in the NY Times By Lydia DePillis on Nov. 13, 2025.

Investment firms are buying and bundling contractors, leaving some workers and customers worse off.

At 9 a.m. on a Tuesday in late October, as Nathan Hendricks drove to a cabinet installation job in Elk Grove, Calif., he got a call from his office. His employer, Reborn Cabinets, had shut down. All its workers were supposed to return their company vehicles and iPads by the following day.

He was not entirely surprised. The company had changed a lot since Audax Group, a private equity firm, bought it in 2022 and added it to a collection of home improvement brands called Renovo Home Partners. It started using lower-grade materials, forced employees to buy their own protective gear and pushed them into subcontracting roles, Mr. Hendricks said.

“When I got word of this, my heart did sink,” Mr. Hendricks said. “My main concern was, what am I going to do now? Am I still going to get paid and all that?”

He didn’t get his last paycheck, or reimbursement for the $400 he spent on gas driving to job sites over the previous two weeks. About 1,500 employees were abruptly terminated, along with their health insurance. Customers were left with unfinished roofs, basements and bathrooms. Renovo’s websites, email addresses and social media went dark. Nobody answered the phone.

“I thought Reborn Cabinets was going to be a family company for years to come, but they did kind of sell out,” Mr. Hendricks said. He found work with a small painting company this week, and said he would avoid private equity-owned companies in the future.

Renovo’s sudden closure shows how private equity ownership can go wrong for an industry that has been flooded with funds seeking to roll up small businesses with a few million dollars a year in revenue and good reputations in their local markets.

The thesis is simple: After gaining efficiencies of scale, acquirers can sell the integrated bundle, or platform, to someone else, doubling or tripling their money. But that bet hasn’t paid off in recent years. Many home-improvement companies have stagnated as interest rates have risen and the housing market has slowed.

“There’s been a lot of consolidation activity, lots of platforms launched, mostly by private equity funds, but very few have gotten to that exit,” said Randy Korach, who started a roofing company, then became chief executive of a much larger one when a private equity company bought it and several others in 2021.

The newly named Roofing Corporation of America was sold in 2023 to a public company with a range of property services. “There’s probably going to be a lot of successful platforms built, but probably others that maybe didn’t mitigate against market downturn risk,” Mr. Korach said.

Rolled Up

Renovo took shape in 2022 when the Audax Group, a Boston-based private equity firm, started buying up family-owned remodeling companies that were leaders in their regions.

Minnesota Rusco had been around for 70 years, and was known for its catchy television jingle

. Dreamstyle Remodeling was founded in 1989 in Albuquerque by a husband-and-wife team who amassed a 125,000-person client list. Newpro, which a family started in 1945 as a window replacement business, grew into one of the largest remodeling firms in the Northeast.

They were among seven purchased with about $150 million from some of the largest private lenders in America: BlackRock, Apollo and Oaktree Capital Management. By 2022, Renovo ranked eighth on Qualified Remodeler’s list of the largest home improvement companies, with 2,700 employees and $653 million in annual revenue.

Some executives stayed on to help run their companies, but knitting them together proved difficult. Management was centralized in a “top-heavy” office of people who didn’t all have experience in home improvement, said Melanie Marfoglio, who was vice president of Reborn Cabinets when it was acquired and stayed with the company until July.

“The execution was all wrong, because they didn’t take into consideration individual cultures,” Ms. Marfoglio said. “These are different customers, too, so a one-size-fits-all doesn’t really work.”

Cost cutting drove away top performers, said Douglas Elam, a project manager for Dreamstyle from 2021 to 2023. He left for another private-equity-owned remodeling company that closed in 2024, then rejoined Dreamstyle this year.

“The biggest expenditure is labor, so they start renegotiating with the installers and say, ‘The 10 to 12 percent you were making is now going to be 8,’” Mr. Elam said. “The A team walks out the door, and we’re left with the B’s and the C’s. So quality went down, and complaints went up.”

At the same time, higher prices for labor and materials put pressure on costs. Higher interest rates dissuaded homeowners from moving, which weighed on the kind of remodeling activity that happens when houses change hands.

“Renovo looked really good on the surface,” said Aaron Toomey, a managing director at Anchor Peabody, an investment advisory firm for the building industry. “Everyone who watched this industry or thought about it carefully knew that the post-Covid boom was pulling a lot of demand forward.”

 

Although Dreamstyle was the worst performer, the other companies started faltering too, as aggressive expansion plans didn’t pan out and the company went through several layoffs. Qualified Remodeler reported the company’s revenues dropped to $449 million in 2024. The lenders acknowledged that Renovo wasn’t making debt payments as scheduled in late 2024, and in April 2025, BlackRock essentially foreclosed on Audax, wiping out its equity interest.

Higher interest rates have dissuaded homeowners from moving in recent years, which has weighed on the remodeling work that typically happens when houses change hands.Credit…Tag Christof for The New York Times

BlackRock tried to restructure Renovo with new executives and more investment in integrating internal systems, and said its performance had improved. In the fall, BlackRock put the company up for sale.

But there were no offers. On the evening of Oct. 27, Renovo executives were told that the company was out of money, and that BlackRock wouldn’t put any more in. The next morning, they told their direct reports, who broke the news to everyone else, including Mr. Hendricks in Northern California.

Telling workers at the company’s call centers was particularly difficult because many worked paycheck to paycheck, said Doug Herring, the former vice president for inside sales. He had been asked to set goals for the next year, had just signed a contract with a new vendor and had been approved to hire new employees.

“This really came out of nowhere,” Mr. Herring said. “I’ve been doing this 30-plus years, and I’ve never seen anything like this.”

A few days later, Renovo filed for bankruptcy, seeking to dissolve the business rather than reorganize it. Its petition listed less than $50,000 in assets and more than $100 million in liabilities, with hundreds of creditors. According to screenshots viewed by The New York Times, Renovo processed a last round of payroll for headquarters employees, but not for workers at its subsidiaries.

“BlackRock committed substantial resources to support Renovo’s turnaround in an effort to manage investments we make on behalf of our clients,” said Patrick Scanlan, a spokesman for the company.

“Despite the efforts by BlackRock and other investors to stabilize the company, significant performance and cash flow challenges persisted, and a sale process found no buyers. This ultimately led the Renovo board to determine that liquidation was the only viable option for the company.”

‘An All-In, Full-Frontal Attack’

Private equity is a copycat industry. In the mid-2010s, firms bundled up HVAC, pest control and plumbing contractors, which promised recurring revenue and considerable economies of scale. Many contractors, like Renovo, have been consolidated into platforms with different services that can be promoted to customers once they’ve tried one.

Roofers are the latest fashion. Although homeowners don’t need a new roof very often, it’s also not something they can defer, which means it’s less subject to the ups and downs of the housing market. Demand is increasing as damaging storms become more frequent and insurance requirements tighten up.

After a five-year acquisition spree, private equity groups own most of the largest roofing companies in the country, according to Roofing Contractor magazine’s top 100 list.

Josh Sparks took private equity investment for his roofing company in 2021, and has since accumulated 25 brands under the umbrella Infinity Home Services.

“It has been an all-in, full-frontal attack,” Mr. Sparks said on a roofing industry podcast

. “Anybody who owns a roofing company or, heck, anyone who has a company that starts with the letter R, they’re being solicited by private equity firms.”

Mr. Sparks said there could be trade-offs. “They will deploy the private equity 101 model, which is what everybody’s afraid of and should be afraid of,” he said. “My question is, what value does that create for the customer?”

Sean Shapiro sold his roofing company to a private equity firm in 2021 and now serves as a broker for other roofing company owners looking to sell. Even with economic pressure mounting on home improvement companies, Mr. Shapiro said, he doesn’t see private equity’s appetite abating.

“They’re using other people’s money for the most part, so they’re still going to go deploy it even if they are not as bullish on that industry,” Mr. Shapiro said.

Erie Home was founded in 1982 in Toledo, Ohio, and acquired by Gridiron Capital in 2021. Soon after, Erie pushed out some of its long-tenured executives. Bad reviews describing high-pressure sales tactics piled up.

Harrison Dilthey, who worked as a salesperson in Erie’s Boston office in 2023, described the company’s tactics as predatory. Midway through his time there, Erie reduced the share of sales it would pay in commissions. That prompted representatives to open with an offer significantly higher than the true cost, Mr. Dilthey said.

“The pressure of selling and the culture there was really toxic,” he said. Churn was high. Although he made $70,000 in five months and was among the company’s top performers, he said, Mr. Dilthey left after five months once he had paid off his student loans.

In September, Gridiron sold Erie to another of its portfolio companies, Leaf Home, the second-largest remodeling firm in the country, with $1.8 billion in sales. The company took on $4 billion in equity investment and debt from Apollo and Ares Management to finance the transaction.

“The support and expertise of our investment partners have allowed us to build a resilient, robust and sustainable organization that will continue delivering premium products and services to homeowners for many years to come,” said Jenilee Common, chief executive of Leaf Home.

Doug Farr, who worked for Erie for 20 years, left when Gridiron took over. He opened his own company, Great Lakes Remodeling, and isn’t looking to sell. But he said it was getting harder to compete against private equity-backed rivals with cash to pour into recruiting, technology and advertising.

“Then you’ve got little old me, and I’m fighting that,” Mr. Farr said. “It’s a lot more difficult today because the industry is filled with a bunch of private equity money being thrown everywhere.”

Lydia DePillis reports on the American economy for The Times. She has been a journalist since 2009, and can be reached at [email protected].

A BlackRock-Backed Roofing Conglomerate Goes Bust – The New York Times

Anchor Peabody sponsored and attended the annual National Association of Floor Covering Distributors / National Building Material Distributors Association (NACFD/NBMDA) Conference in Chicago this month. After a successful conference, we summarize our thoughts and outlook below

This year began with high hopes of a robust recovery in the building industry, with inflation trending down and a business and tax-friendly administration incoming. However, persistently high interest rates, trade policy volatility and declining consumer confidence have presented significant headwinds to a sector that has already endured several rough years. While demand did not materialize the way many had hoped, many operators used this time to focus on the mission, rationalize their organizations, and fortify their businesses to best position them for the inevitable recovery. Ultimately, most companies have had to work extremely hard to stay flat and avoid contraction, but have laid significant groundwork to capitalize on a future expansion.

As a trusted advisor to owners and executives in the Flooring and Interior Finishes space, Anchor Peabody leverages its unmatched industry knowledge and M&A expertise to achieve best-in-class outcomes for founders and owners. We welcome a confidential conversation to discuss your options and strategy in this rapidly consolidating market.

• Rates, prices and uncertainty put damper on demand. Interest rates and mortgage costs have remained stubbornly high, stunting demand for homebuilding and home sales. Existing home sales are the number one driver of residential repair and remodel spend, and with the vast majority of homeowners sitting in sub 5% mortgages, most are happy to stay put rather than trade into higher cost financing. In addition, inflation, which was trending downward at the end of last year and early 2025, has remained elevated, increasing costs to consumers and hampering the Fed’s willingness to lower rates. This has resulted in a decline in demand for R&R projects, including flooring, kitchen & bath, and siding & exteriors. Former Audax portfolio company Renovo, who specialized in residential remodeling projects, shut its doors and filed for Chapter 7 bankruptcy protection in early November.

December will bring the final Fed meeting of the year, and markets are betting on an additional rate decline, supported by falling jobs numbers and an uncertain macroeconomic picture. Any rate decline will be welcome news to builders and remodelers, but rates likely need to come down a full percentage point or more to really light the market on fire again.

• Tariff policy and ongoing uncertainty make decision making difficult.  In April, the administration announced sweeping reciprocal tariffs on nearly every US trade partner. This was followed by a number of delays, exceptions and exclusions and ongoing negotiations. The moving target of tariffs has made it difficult for distributors and manufacturers to make long-term sourcing and investment decisions for where their product is produced. Now, the Supreme Court has heard oral arguments in a case brought by small business owners and certain states, arguing that the April reciprocal tariffs are a violation of International Emergency Economic Powers Act (IEEPA) and an unconstitutional usurping of Congress’ power of taxation. Should the plaintiffs prevail, the tariffs will be found unenforceable and removed going forward.

While this would bring immediate relief to consumers on prices for imported building products, the follow-on effects will be disruptive. Similar to the freight induced price run-up in 2022 and 2023, parts of the channel (largely distribution) will be left with significant high cost inventory, with new product hitting shores at lower prices. This will squeeze margins for those distributors most exposed to price and inventory risk. Further, if ruled invalid, the tariff money collected to date will likely need to be refunded, but how that money is delivered to tariff-payers and allocated down the value chain is an open question.

• Industry participants focus on what they can control. Multiple challenges facing the industry does not mean that companies have been quietly biding time waiting for a rebound. Instead, top operators are focusing on ways to win in tough environment: emphasizing private label brands to drive margin, competing on service to gain share, rationalizing costs to preserve profitability, and going upstream for direct product sourcing.

The companies we have met that are outperforming the market (in these days that is any growth at all or even flat from last year) are working overtime to eek out these results: Driving demand for private label products that command better pricing and lead to market share gains; focusing on profitable customers where they can offer the most differentiated service; taking out redundant costs and streamlining processes with software deployment; eliminating middle-men importers and line curators to go direct-to-factory and capture margin.

• Consolidation continues. Despite the volatility of the past year, consolidation in the building materials industry, and in distribution particularly, continues although at a perhaps more modest pace than previous years. Artivo, the holding company behind Viginia Tile and Galleher, completed acquisitions of Tom Duffy/B.R. Funsten and Walker Zanger/Anthology. Home Depot completed the acquisitions of roofing distributor SRS and wallboard wholesaler GMS this year. Lowe’s purchased flooring installer Artisan Design Group and drywall distributor Foundation Building Materials. Scale and access to capital are even more important drivers of value in a challenging market, and some smaller distributors are seeing the value of combining with larger operations. Many top businesses however are reluctant to come to market during a middling period in the industry and are looking forward to a better 2026 before pulling the trigger.
• Advice for potential sellers. The M&A market for flooring and interiors businesses remains accessible, with multiple large acquirers still looking to expand through acquisition. While valuations are generally more cautious and conservate than they were a couple of years ago, top performing businesses still command a premium and buyers will pay up for companies that buck the trend.

Potential sellers should continue to focus on things that will drive value and certainty of close. This includes a) Customer and end-market diversification if the current business is highly concentrated in one market; b) Strengthening the organization and back office and ensuring the business has a strong team of leaders in sales, finance and accounting, and marketing; c) Considering deployment of software and systems that can help across the business in both marketing and operations (e.g., CRM systems, job tracking, KPI monitoring, etc.).

• Preparation remains paramount. It takes approximately 6 months from start to finish to complete a private sale in the industry, but at Anchor Peabody our work often starts much earlier. The more preparation time, the better the outcome. Understanding the company strategy, the management team and bench, the strength of the finance and accounting team, the growth plan and its defensibility are all key to achieving a successful transaction. We work with potential sellers months and sometimes years before they the ultimately plan to go to market.

The International Surfaces Show: If you are in the flooring & interiors business, we’d love to see you at TISE 2025 in Las Vegas in January. If you’re interested in an on or off-site meeting, please reach out to me at [email protected] or call at 917.520.2256.

Artisent Floors Announces Acquisition of Elite Flooring

Originally published here.

[MEMPHIS, Tenn., October 16, 2025] — Artisent Floors, a leading provider of comprehensive flooring solutions, is pleased to announce the acquisition of Elite Flooring, a respected name in the flooring industry known for its quality service and long-standing client relationships.

This strategic acquisition brings together two strong, values-driven organizations with complementary strengths. The integration will enhance operational capabilities, expand geographic reach and deliver even greater value to clients across all markets.

“Elite Flooring is a natural fit for Artisent Floors,” said Barry Griffith, CEO of Artisent Floors. “Elite brings a strong client base and a culture that closely aligns with ours. Like Artisent, Elite was built on a foundation of integrity, innovation and exceptional service. This integration allows us to expand our capabilities and market presence while upholding the excellence that distinguishes our organization.”

Elite Flooring will continue operations under the Artisent Floors brand. The acquisition is expected to generate immediate synergies across project management, customer support and operations, with key leadership remaining in place to ensure a smooth transition and continuity of service.

“We’re proud of what we’ve built at Elite Flooring and are excited for this next chapter with Artisent Floors,” said Joseph Nassar and Joseph Riccardo, Co-Founders of Elite Flooring. “Artisent shares our commitment to quality, service and people. This partnership ensures continued growth, opens new opportunities for our team and preserves the values our clients have trusted for years.”

This acquisition marks a significant milestone in Artisent Floors’s growth strategy, reinforcing its position as a market leader in the flooring industry.

About Artisent Floors

With nearly four decades of experience, Artisent Floors is a leading provider of flooring solutions specializing in the multifamily industry. Operating across 17 locations nationwide, the company offers next-day service and a full range of flooring services, including replacement, new construction, and renovations. Artisent Floors is dedicated to delivering high-quality, reliable flooring solutions that enhance properties’ value and appeal.

About Elite Flooring

Elite Flooring has delivered expert flooring solutions for 30 years, with a focus on quality craftsmanship and exceptional service across residential and commercial sectors. Anchor Peabody served as the exclusive financial advisor to Elite Flooring in this transaction.

 

https://anchorpeabody.com/wp-content/uploads/2025/11/Anchor-Peabody-HPE-Market-Report-Q3-25-2.pdf

Expanding to 34 Locations Across Maine and New Hampshire

Belgrade, Maine, July 22, 2025 – Hammond Lumber Company (Hammond) is proud to announce its plans to acquire Ware-Butler Building Supply (Ware-Butler). The acquisition will expand Hammond’s retail footprint from 22 to 34 locations throughout Maine and New Hampshire, further strengthening its ability to serve communities across the region. The acquisition will officially close on July 31, 2025.

The transaction includes 15 Ware-Butler retail locations in Maine: Corinth, Dixfield, Dover-Foxcroft, Gorham, Greenville, Kingfield, Livermore Falls, Madison (Rt 201), Madison (Main Street), Mexico, Orrington, Palmyra, Stillwater (Old Town), Waterville, and West Enfield. Hammond Lumber Company will consolidate the Dixfield, Greenville, and Orrington locations into nearby Hammond branches to optimize resources and better serve local customers. All Ware-Butler employees will be offered continued employment and welcomed into Hammond Lumber Company’s operations, including relocation to nearby branches where applicable, as part of a smooth integration process.

Also included in the acquisition are Ware-Butler’s wall panel manufacturing facility in Stillwater and two metal roofing production lines under the Peak Metals brand, located in Stillwater and Palmyra. These assets will expand Hammond’s in-house manufacturing capabilities, particularly for framing packages and custom roofing systems, aligning with customer demand for high-quality, prefabricated building components.

With this acquisition, Hammond solidifies its position as one of the largest independent building material retailers in the Northeast. The company will employ over 1,200 people across Maine and New Hampshire and is projected to generate more than $550 million in annual sales.

“This is a meaningful opportunity to continue a legacy shaped by trust and long-standing relationships,” said Mike Hammond, President and CEO of Hammond Lumber Company. “In the months ahead, we’ll be focused on listening, learning, and supporting the people and communities who have built these businesses.”

“We have a deep respect for Hammond Lumber Company and the values they stand for,” said Jason and Chris Brochu, Co-Presidents of Pleasant River Lumber. “This was a thoughtful and deliberate decision, and we’re confident that Hammond is the right long-term steward for the Ware-Butler team, its customers, and the communities they serve. We look forward to seeing the continued success of the company under their leadership.”

Ware-Butler Building Supply was founded in 1925 and acquired by Pleasant River Lumber in 2020. Ware-Butler grew rapidly under Pleasant River Lumber’s ownership through acquisitions including Crescent Lumber, Phinney Lumber, Jordan Lumber, Campbell’s Building Supply, Puiia Building Supply, Twin Rivers Building Supply, Webber Hardware, Morrell’s Hardware, and Thompson’s Hardware.

Pleasant River Lumber will continue to operate its two spruce sawmills in Dover-Foxcroft and Enfield. The sale does not include Pleasant River Lumber’s two sawmills, AA Brochu Inc., Moosehead Cedar Log Homes, and the Woodsmith’s Cabinetry manufacturing facility—all of which will continue to be operated independently by Pleasant River Lumber.

Anchor Peabody Advisory Services represented Hammond Lumber Company as the buy-side advisor. Cafa Corporate Finance represented Ware-Butler Building Supply as the sell-side advisor in the transaction.

About Anchor Peabody

Anchor Peabody is a premier investment banking firm comprised of former owners, operators and investors in the building products and construction industry. The firm combines over 100 years of capital markets and mergers & acquisition experience with a modern approach to investment banking. Anchor Peabody prides itself on providing outsized outcomes for its clients, by maximizing banker satisfaction, both professionally and personally. For more information, please visit: www.anchorpeabody.com.

About Hammond Lumber Company

Hammond Lumber Company was founded in 1953 by Skip and Verna Hammond with a single sawmill in Belgrade, Maine. Today, the fourth-generation, family-owned company is one of the largest independent lumber and building material retailers in the northeast. Hammond Lumber Company carries a full line of building materials, millwork, kitchen, bath and flooring products, and is a quality manufacturer of eastern white pine. Hammond has multiple Kitchen, Bath & Flooring Design Centers and showrooms, Home Planning Design Centers, and millwork showrooms across the State.

Hammond is the 13th largest pro dealer and lumberyard in the nation by 2024 sales, according to the LBM Journal 100, and the second largest family-owned business in Maine, according to Mainebiz. The building material supply company has received numerous awards, including 2020 ProSales Dealer of the Year, Best Places to Work in Maine in 2021, 2022, 2023, and 2024, Best Company to Work For in New Hampshire in 2023 and 2024, National Safety Council’s 2024

Original Article appeared here.

At Coverings 2025 in Orlando, Florida at the end of April, we met with more than 25 tile and slab manufacturers, distributors, fabricators, and installers. Attendance seemed lighter than prior years. One distributor remarked that installer and fabricator attendance seemed lighter, and traffic was, not surprisingly, sparse in areas occupied by Chinese companies. Tariffs and interest rates dominated conversations, but we also had in-depth discussions with business owners contemplating exits and wanting to talk through how best to position their companies.

U.S. Tariffs. Although tariffs were front of mind, for now, impact on the tile and stone industry appears to be muted. Tile and stone importers successfully relocated their supply chains when antidumping and countervailing duties were imposed on Chinese ceramic tile and quartz slab approximately five years ago. With respect to the 10% “baseline” tariff, most distributors indicated agreements to “split the difference” with manufacturers and were awaiting end of the 90-day pause before taking price actions, if any. Some distributors indicated they have announced price increases with the understanding that any difference would be refunded to customers. More than near-term pricing, companies were concerned with the blanket of uncertainty tariffs have brought to a market that was starting to stabilize and show signs of recovery. Specifically, companies speculated about potential port congestion created by companies stockpiling in anticipation of tariffs and workers being furloughed; conflicting information on how tariffs will be applied; negative impact on earnings of companies heavily reliant on Chinese imports; and impact on the jobs market and consumer sentiment.

Interest Rates. More than tariffs, current interest rate environment continues to weigh on construction markets. Attendees expressed the immediate need for sizable cuts to spur consumer demand, unlock home equity, and kickstart sustained recovery. News released on April 30th of an economic contraction in 1Q25 further contributed to attendees’ annoyance. Attendees questioned the Federal Reserve’s 2% inflation target rate and its arbitrariness. Despite interest rates remaining at a higher level than what everyone would like, some attendees shared increased business activity after a slow start to the year. In general, attendees were more optimistic than at the February 2025 Kitchen & Bath Industry Show in Las Vegas, with some sharing market narrative that second half of the year and 2026 will be much stronger.

Mergers & Acquisitions. Against this backdrop, Anchor Peabody received many inbound requests to meet with business owners. Majority of meetings involved ageing business owners that wanted to discuss how best to position their companies for a sale. Topics included whether a fabricator should acquire a distributor to more quickly scale his business and whether it would make sense to divest a fast-growing segment now or exit as a combined business down the road. We also met with younger business owners that, perhaps because of all the ups and downs over the last handful of years, were thinking about how to “take some chips off the table” to de-risk themselves. Many of the discussions were around growth and margin profiles that help businesses stand out, recent transactions and how they translate into valuation for their businesses, and how an investment banker can add value before and during a sale transaction.

As a trusted advisor to owners and executives in the Tile & Stone space, we leverage our unmatched industry knowledge and M&A expertise to achieve best-in-class outcomes for founders and owners. We welcome a confidential conversation to discuss your options and strategy in this rapidly evolving market. If you are interested in discussing further, please reach out to me at [email protected] or call at 551.795.5725.

The influx of private equity money in the building industry has led to record deal making, ongoing consolidation and an active market for companies like yours.  It has also brought another change – the increasing level of inbound solicitations from buyers and their representatives.  Owners’ voicemail and email inboxes are full of outreach from brokers and buyers looking to purchase businesses. Should you respond to this unsolicited interest?  It’s easy when you are running a business full time, especially when you know the low probability of a deal panning out or if you aren’t for sale, to immediately chuck these inbound offers into the digital trash and ignore the outreach.  It’s also easy to be flattered by this interest and waste a whole lot of time.

Here is our take on how to think about and navigate the inbound offers to purchase your company.

Keep a Record of Inbound Solicitation.  Even if you aren’t looking to sell anytime soon (and especially if you are) keep a record of who has reached out to you in the past and of any conversations you have.  A simple dedicated folder in your email system is a good way to file all of these away and ensure you have a list of people who have expressed interest when and if the time comes to explore a potential sale.

Understand Why They Are Reaching Out For You. Private equity firms and some strategic buyers have a mandate to acquire or invest in businesses.  They work for their investors/shareholders, and acquiring businesses like yours has a long track record of making people a lot of money.  These firms seek to acquire you and grow your earnings, see you as underperforming or undervalued, an important player in a key market or offering a service they want to own in an industry consolidation, and/or just a business in the right place at the right time to invest in for the current market cycle.

Know Who You Are Talking to and What You Can Learn from Them.  If you choose to take a call or meet an interested party, it’s important to understand who they are and what you can learn in a conversation.  You have a business to run, your time is valuable, so make sure the effort is worth it.

Most of the private equity firms who reach out for you know nothing about your business and little about our industry.  Private equity will sometimes do this outreach themselves but will often hire brokers or investment banking firms to help with this outreach, so it may not be clear exactly who is behind the effort.  They usually take a “spray and pray” approach to outreach – calling and emailing from large industry databases in an indiscriminate manner.  As a private equity firm, the thinking on this approach is to plan on 10 out of 100 companies contacted to respond, hope to submit loose offers on a handful – and maybe get one (1) deal done when it is all said and done for about a 1% success rate.  This is not a great return on time.

If you are going to spend the time, private equity firms can be a good source of information.  Owners can ask what valuations these firms are paying (typically expressed as a multiple of EBITDA – Earnings Before Interest, Taxes, Depreciation and Amortization) for businesses like yours, and the rationale behind why there is interest in the first place.  You can also try to elicit information on how they run their portfolio companies, what options are for existing owners and employees, what the interested party can bring to the table to further growth and expansion, and how they think about important things like company culture and branding.

Conversations with strategic buyers (companies already operating in the industry with or without any private equity affiliations) are a different matter.  You know who they are; you see them at industry conferences, their names are in industry rankings, and the news is littered with them acquiring businesses like yours.  These conversations, if kept confidential, are usually worth the time.

As a CEO or owner, knowing what is happening outside of your business is part of the job.  The quid quo pro for speaking with strategic buyers is you get to understand a little about their intentions, and in return they get to understand yours.  You can probe the seriousness of their interest and how it may impact your market, gain insight into potential valuation expectations, and whether they might be a good fit for your company.  Even if you do not act on this information, this is good information and a relationship to have.

Beyond Information Harvesting, Understand What You Are Getting Yourself Into.  For the select few, and it does happen, you may like what you’ve heard and want to consider a potential offer from one of these groups.  Fair enough, but don’t go it alone – here’s why:

Private equity firms and corporations employ specific people, in some cases teams of people, or pay investment bankers to reach out for owners of businesses like yours.  They would not do so if it wasn’t in their financial best interest.  The investment for this outreach is wildly profitable if the buyer can secure what is referred to as a “proprietary” deal, which is a moniker for a deal which doesn’t have any competitive tension from an auction run by someone like Anchor Peabody.  Proprietary deals almost always trade below market value and not just in cash, but in the legal terms and structure of the transaction.  Buying a deal below market, even if for only 0.5x savings with favorable terms and/or structure is great return on investment for them – this is why your inbox is inundated with calls like this.

Know that if you engage in this exercise alone, aside from claiming you don’t have to sell (most of you don’t) you have little to no leverage and no backup plan to turn to if the buyer starts changing the deal if you truly want to sell.  Perhaps most importantly, while you work on this potential opportunity to transact, you won’t be focusing 100% of your time on driving earnings (the buyers know this, too).  Your earnings could fall in the middle of the process – which the buyer would take into consideration (i.e. a purchase price reduction), and since most of these unsolicited offers often don’t work out, you may have only hurt yourself in the process.

Never Share Company Information or Sensitive Data Without an NDA.  There are competitive concerns owners should be aware of in any conversation with a potential suitor.  Information is currency, and owners should be careful about divulging any data before a non-disclosure agreement (NDA) is in place. Some buyers will use these interactions as a means of “kicking the tire” and seeing what they can learn about a potential competitor, even if no deal is struck. Owners and executives should not disclose revenue, profitability, customers, buying agreements, margins or any other potentially competitively sensitive data before the appropriate safeguards are in place to ensure such information cannot be shared with other parties or used in any way to harm their businesses.

Don’t Be Fooled by the Headline Number.  You may receive an unsolicited offer that looks great on paper but be prepared for the complexity of a transaction and all that comes with it.  An initial offer may appear enticing on its surface, with a value for your business that you would be happy to receive. However, there is much more to consider in terms of deal mechanics and structure.  How much of the purchase price will be upfront cash vs. later payments?  Does the buyer expect you to reinvest a portion of the proceeds into the business?  What level of working capital is the buyer expecting to be delivered at close? Does the buyer have a history of offering attractive values and then re-trading at the last minute?  What are your options if this deal falls apart?  These are important questions to navigate that determine the ultimate economics of the deal and how much the seller walks away with.

Understand the Value of Your Business and Periodically Weigh Your Options/Future Plans.  It is difficult to evaluate an offer in a vacuum.  Before responding to any interest in your business, you should understand where the market is, what other businesses are trading for, and how you stack up in terms of growth, margin, infrastructure, systems and employees. Sell-side advisors like Anchor Peabody can quickly provide views on valuation and positioning, and help you understand if any offers are competitive given the strengths and opportunities of your business.

Additionally, just because you aren’t interested today doesn’t mean contemplating a deal and all it entails isn’t worth it.  Every business transitions someday, either to heirs, a new third-party owner, or to wind-down and extinction. Once a year, owners should think about their long-term plans and what they want to do with their business when they are ready to part with it. High levels of inbound outreach indicate that the market for these businesses is active. These windows of market activity open and close with investor interest, industry structure and the strength of the broader economy and the specific sector, and there is no guarantee that valuation and levels of interest will be the same tomorrow as they are today.

If you are less than 3-4 years out from a potential exit, it is probably worth taking some time today to hear from potential buyers, thinking about what your goals are, and determining what, if anything, you should be doing to prepare your business for sale.

Most Importantly, DON’T Go it Alone.  The harsh reality is you spend 100% of your time running your business and the people looking to acquire your business spend 100% of their time doing deals.  You are at a distinct disadvantage right out of the gates just from a sheer knowledge and time standpoint.  You don’t know what you don’t know, you are distracted by the need to run your business, and if you aren’t in the market everyday – it is impossible to understand what is fair and what is not.

Consider this: Private equity firms, extremely sophisticated financial people who have the knowledge and capability to sell the companies they own almost always decide to pay an investment banker to help them transact.  Why?  Their mandate is to invest in and acquire great businesses.  They know their time is better spent improving the businesses they own and looking for more to buy instead of trying to save some money going it alone.  Private equity firms also know the competitive tension created by hiring an investment banker – especially one who has industry knowledge to be additive to a process – who is incentivized to drive the price, structure and terms for a deal, covers the investment banking fees in many cases 2x-3x over.  If the most sophisticated people buying and selling companies don’t go it alone, why would you?

Sale transactions are complex processes and sellers can and do get taken advantage of. Many buyers will say they prefer two-way negotiations between themselves and a seller, and in some cases will insist on doing so.  Don’t fall for this.  If a buyer has sincere interest in acquiring your company, they should respect your desire to make sure you have no regrets.  Even if the offer is extraordinary, you will never know what is possible until you test the market.  Also, once you sign the offer there is usually a 2-3 month time period for diligence.  Having no “backup option”, yet another reason to hire an investment banker, to keep your buyer honest should they try to change the deal means you have lost a significant amount of leverage as both sides will begin to spend real money and time trying to consummate a transaction.

Sellers who are seriously contemplating a deal should secure both legal and financial/strategic representation.  Anchor Peabody or another investment banking firm like us ensures your sale process is competitive, your value is optimized, and you walk away happy with the outcome.  Hiring the proper legal counsel will ensure that definitive documents are well-negotiated with market terms that protect the seller.

At the Kitchen & Bath Industry Show (“KBIS”) in Las Vegas last week, we met with stone manufacturers, distributors, and fabricators, including Caesarstone, Cambria, Wilsonart, and Architectural Surfaces Group, and private equity firms that have invested in the sector and continue to eye opportunities. Topics discussed last month at The International Surface Event (“TISE”) in Las Vegas, including tariffs, immigration, and resilience in the high-end of the market, also resonated with stone companies. Below are highlights of select topics that were front of mind at KBIS, including drivers of market recovery, silicosis, and opportunity for value creation through mergers and acquisitions (“M&A”).

Drivers of Market Recovery. The recent slowdown appears to have impacted stone companies more than tile and flooring companies that attended TISE. A company remarked that new product introductions at KBIS seemed much higher than in prior years, perhaps a sign that companies are trying to drive growth in an otherwise flat market. Companies are hoping for improvements in the second half of this year. Not surprisingly, companies believe lower interest rates are critical to broad-based recovery. Companies also agreed with the finding presented in a recent Zonda research report that pent-up demand, together with homeowners tapping into historically high home equity, will amplify recovery in the residential repair and remodel market as rates decline. When asked about demand pull-forward during COVID that could moderate recovery, companies agreed with Zonda that while revenue increased during COVID, that increase was primarily driven by higher prices resulting from supply chain disruptions. Volume growth was more muted, and demand pull-forward was not as strong as reported in the media and anecdotes. Therefore, companies believe that significant pent-up demand will drive sustained recovery in 2026 and beyond.

Silicosis. Silicosis has been a known risk in stone cutting for hundreds of years. More recently, plaintiffs named Caesarstone as a defendant in silicosis cases in 2008. Prior to taking Caesarstone public in 2012, underwriters and their counsel conducted due diligence on silicosis and potential liability. They concluded that warning labels Caesarstone affixed to each slab provided protection and that responsibility, and therefore potential liability, rested with fabricators. In the last couple of years, silicosis has become front of mind again for the stone industry, owing to the proliferation of lawsuits in the U.S., with companies across the entire value chain named as defendants, and Australia’s ban on quartz countertops. We spoke with a manufacturer that has been named in approximately 65 lawsuits. The manufacturer estimated that exposure was a million dollars per case and was contemplating filing for bankruptcy protection. In a separate meeting, a distributor asked about how acquirors are looking at lawsuits in the context of M&A. No one could predict how all the silicosis lawsuits would play out, but they are, undoubtedly, an unwelcome distraction.

Mergers & Acquisitions. Against this backdrop, larger, better capitalized companies contemplating exits indicated that they are waiting for Earnings before Interest, Taxes, Depreciation, and Amortization (“EBITDA”) to “get back to a higher level.” They also speculated that their smaller competitors may not have the same luxury and could become acquisition targets if current conditions persist. Without certainty around the timing of recovery, companies were eager to talk about value creation opportunities. We brainstormed strategies with companies to maximize shareholder value, including acquiring smaller companies and merging with peers. These strategies drive synergies, scale, and geographic and product diversity that will result not only in higher EBITDA but also valuation multiple at exit. Value creation strategies are not available just to larger companies. Smaller companies can also merge or “roll” their equity when selling, enabling participation in future equity upside.

As a trusted advisor to owners and executives in the Tile & Stone space, we leverage our unmatched industry knowledge and M&A expertise to achieve best-in-class outcomes for founders and owners. We welcome a confidential conversation to discuss your options and strategy in this rapidly evolving market.

Coverings – Orlando: We would love to see you at Coverings in Orlando on April 29-30, 2025. If you are interested in an on or off-site meeting, please reach out to me at [email protected] or call at 551.795.5725.