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