www.harriswilliams.de Harris Williams & Co. Ltd is a private limited company incorporated under English law having its registered office at 5th Floor, 6 St. Andrew Street, London EC4A 3AE, UK, registered with the Registrar of Companies for England and Wales under company number 7078852. Directors: Mr. Christopher Williams, Mr. Ned Valentine, Mr. Paul Poggi and Mr. Thierry Monjauze, authorised and regulated by the Financial Conduct Authority. Harris Williams & Co. Ltd Niederlassung Frankfurt (German branch) is registered in the Commercial Register (Handelsregister) of the Local Court (Amtsgericht) of Frankfurt am Main, Germany, under registration number HRB 96687, having its business address at Bockenheimer Landstrasse 33-35, 60325 Frankfurt am Main, Germany. Permanent Representative (Ständiger Vertreter) of the Branch Niederlassung: Mr. Jeffery H. Perkins. BUILDING PRODUCTS & MATERIALS INDUSTRY UPDATE │ AUGUST 2015
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www.harriswilliams.de
Harris Williams & Co. Ltd is a private limited company incorporated under English law having its registered office at 5th Floor, 6 St. Andrew Street, London EC4A 3AE, UK, registered with the Registrar of Companies for England and Wales under company number 7078852. Directors: Mr. Christopher Williams, Mr. Ned Valentine, Mr. Paul Poggi and Mr. Thierry Monjauze, authorised and regulated by the Financial Conduct Authority.
Harris Williams & Co. Ltd Niederlassung Frankfurt (German branch) is registered in the Commercial Register (Handelsregister) of the Local Court (Amtsgericht) of Frankfurt am Main, Germany, under registration number HRB 96687, having its business address at Bockenheimer Landstrasse 33-35, 60325 Frankfurt am Main, Germany. Permanent Representative (Ständiger Vertreter) of the Branch Niederlassung: Mr. Jeffery H. Perkins.
Harris Williams & Co. is pleased to present our Building Products and MaterialsIndustry Update for August 2015. This report provides commentary and analysis oncurrent capital market trends and merger and acquisition dynamics within theglobal building products and materials industry.
We hope you find this edition helpful and encourage you to contact us directly ifyou would like to discuss our perspective on current industry trends and M&Aopportunities or our relevant industry experience.
BUILDING PRODUCTS & MATERIALS
INDUSTRY UPDATE │ AUGUST 2015
OUR PRACTICE
Harris Williams & Co. is a leading advisor to the building products and materialsindustry. Our significant experience covers a broad range of end markets,industries, and business models.
JUNE CONSTRUCTION SPENDING POSTS SMALLEST GAIN IN FIVE MONTHS, BUT UP 12% ANNUALLY
BUILDING MATERIAL PRICES FALL DESPITE RISING CONSTRUCTION SPENDING
BUILDERS’ SENTIMENT INCHES UP
OLDCASTLE PARENT CLOSES ON LAFARGE, HOLCIM ASSETS
Forbes Business 8/3/2015
Construction spending in the U.S. rose 12% year-over-year in June, the Commerce Department said Monday. But on amonthly basis, the gain was the smallest in five months. Spending in June was nearly flat with May’s level, inchingup just 0.1% to a seasonally adjusted annual rate of $1,064.6 billion. That was the smallest rise for construction spendingsince January. But June’s total is 12% higher than the estimate for June 2014, when (seasonally adjusted, annual)construction spending stood at $950.3 billion. The June increase fell short of the consensus 0.6% bump forecast byeconomists surveyed ahead of the release by Bloomberg .
Read the full article here.
Construction Dive 8/17/2015
The July numbers bucked conventional wisdom, which says prices of building materials should spike whenconstruction spending is up and fall when spending is down. But nonresidential construction spending is on anupswing, rising by approximately 11.5% between June 2014 and June 2015, and multifamily construction is booming inmost U.S. cities. Yet the prices of concrete, fabricated structural metal products, iron and steel, prepared asphalt,metals, and nonferrous wire and cable fell slightly last month. Crude energy materials and crude petroleum pricestumbled more substantially.
Read the full article here.
NAHB 8/17/2015
The August read on builder sentiment continued its slow rise to a nine plus year high of 61, up one point from July. Theindex has been at 60 or more since June and above the tipping point of 50 since July 2014. Components measuringcurrent and future home sales also rose to or remained at new heights not seen since late 2005. The current salesindex rose one point to 66 and the expected sales component remained at 70 after rising to that level in July.Regional indicators (as measured by a three-month moving average) also rose or remained at heightened levels.
Read the full article here.
Rock Journal 8/6/2015
CRH has closed on a portfolio of Lafarge S.A. and Holcim Ltd. cement, concrete and aggregate production assets in10 countries across the Americas and Europe. At a $7.2 billion enterprise value, the transaction is among the largest todate involving publicly traded, global heavy building materials companies – trailing Cemex-Rinker andHeidelbergCement-Hanson ($15 billion–$16 billion; 2007) and Lafarge-Orascom ($12 billion, 2008). The acquired assetsrepresent the bulk of properties Lafarge and Holcim officials agreed to unload in advance of an early-July mergerforming LafargeHolcim Ltd. The assets span nearly 700 sites, approximately 10 percent of which are cement, readymixed concrete and aggregate plants, plus 18 terminals, under or tied to Holcim (Canada) Inc. Those propertiesextend to the north a solid footprint Oldcastle Materials enjoys throughout Great Lakes markets in the U.S.
Read the full article here.
U.S. HOUSING STARTS NEAR EIGHT-YEAR HIGH, BUT PERMITS FALL
Reuters 8/18/2015
WASHINGTON, Aug 18 (Reuters) - U.S. housing starts rose to a near eight-year high in July as builders ramped upconstruction of single-family homes, suggesting that the economy was firing on almost all cylinders. The CommerceDepartment report on Tuesday added to solid payrolls, retail sales and industrial output data in suggesting theeconomy got off to a strong start in the third quarter. The steady flow of upbeat economic reports has bolstered viewsthat the Federal Reserve will raise interest rates in September. "The Fed is likely to take further reassurance that housingis on an improving trend and this should add to the view that the economy is in more normal territory," said JohnRyding, an economist at RDQ Economics in New York.
Harris Williams & Co. has a broad range of industry expertise, which creates powerful opportunities.Our clients benefit from our deep-sector experience, integrated industry intelligence andcollaboration across the firm, and our commitment to learning what makes them unique. For moreinformation, visit our website.
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INDUSTRY UPDATE │ AUGUST 2015
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INDUSTRY UPDATE │ AUGUST 2015
Bloomberg
Building Design & Construction
Building-Products.com
Bureau of Economic Analysis
Eurostat
Freedonia
Global Industry Analysts
IBIS
New York Times
PNC Economic Outlook
S&P Capital IQ
S&P Leveraged Commentary & Data
The Wall Street Journal
Thomson Financial – SDC Database
Thomson Reuters
U.S. Census Bureau
DISCLOSURES
SOURCES
Harris Williams & Co. (www.harriswilliams.com and www.harriswilliams.de) is a preeminent middle market investment bank focused on the advisory needs of clients worldwide. The firm has deep industry knowledge, global transaction expertise, and an unwavering commitment to excellence. Harris Williams & Co. provides sell-side and acquisition advisory, restructuring advisory, board advisory, private placements, and capital markets advisory services.
Harris Williams & Co. Ltd is a private limited company incorporated under English law having its registered office at 5th Floor, 6 St. Andrew Street, London EC4A 3AE, UK, registered with the Registrar of Companies for England and Wales under company number 7078852. Directors: Mr. Christopher Williams, Mr. Ned Valentine, Mr. Paul Poggi and Mr. Thierry Monjauze, authorised and regulated by the Financial Conduct Authority.
Harris Williams & Co. Ltd Niederlassung Frankfurt (German branch) is registered in the Commercial Register (Handelsregister) of the Local Court (Amtsgericht) of Frankfurt am Main, Germany, under registration number HRB 96687, having its business address at Bockenheimer Landstrasse 33-35, 60325 Frankfurt am Main, Germany. Permanent Representative (Ständiger Vertreter) of the Branch Niederlassung: Mr. Jeffery H. Perkins.
The information and views contained in this report were prepared by Harris Williams & Co. (“Harris Williams”). It is not a research report, as such term is defined by applicable law and regulations, and is provided for informational purposes only. It is not to be construed as an offer to buy or sell or a solicitation of an offer to buy or sell any financial instruments or to participate in any particular trading strategy. The information contained herein is believed by Harris Williams to be reliable, but Harris Williams makes no representation as to the accuracy or completeness of such information. Harris Williams and/or its affiliates may be market makers or specialists in, act as advisers or lenders to, have positions in and effect transactions in securities of companies mentioned herein and also may provide, may have provided, or may seek to provide investment banking services for those companies. In addition, Harris Williams and/or its affiliates or their respective officers, directors and employees may hold long or short positions in the securities, options thereon or other related financial products of companies discussed herein. Opinions, estimates and projections in this report constitute Harris Williams’ judgment and are subject to change without notice. The financial instruments discussed in this report may not be suitable for all investors, and investors must make their own investment decisions using their own independent advisors as they believe necessary and based upon their specific financial situations and investment objectives. Also, past performance is not necessarily indicative of future results. No part of this material may be copied or duplicated in any form or by any means, or redistributed, without Harris Williams’ prior written consent.