Private Equity and Construction

The Construction Industry is Seeing Large Shifts With Several Interrelated Trends.

D. Brown Management Profile Picture
Share

All of the trends that are changing the construction industry today require economies of scale and capital to truly take advantage of. 

Succession. Private Equity and Construction.

The biggest winners will be those leaders who can effectively balance their vision for what’s next in the industry with relentless and disciplined execution while leveraging capital.  

Private Equity firms are seeing that trend and taking a bigger interest in the construction market. They have a keen interest in scaling the Return on Capital of 20-35% that contractors operate at.  

Their model has started to shift from typically asset heavy purchases to a growth mindset with the construction market starting to check both of those boxes.  

A recent ENR article pointed out to increased PE deals in the industry.

PE can be a solid exit strategy for the right type of contractor and anything done to make your company truly valuable to a PE firm will increase it’s value all around.  

Invest a few days in reading about the industry, how the firms operate, and how typical deals are structured before you start exploring this further:


Succession
Continue building value in your business, yourself and your key team members with a good succession strategy....

Succession
Continue building value in your business, yourself and your key team members with a good succession strategy....

Changes in Construction Survey
Changes are a part of the construction process with many underlying causes. While we have all heard the average of 10% changes on construction projects, it is interesting to look at an industry study for validation.
Competitive Advantage
A contractor’s market strategy is the most highly leveraged decision leadership can make. Getting this right then executing effectively can easily have a 2X+ positive impact on earnings over the next 5 years.
Creating The Perfect Day
Contractors build things and ultimately that comes down to men and women in the field. They are the ones adding the value to the raw materials that the customer is ultimately paying for.