In this conversation, Grant Farnsworth, President of The Farnsworth Group and Craig Webb, President of Webb Analytics discuss the M&A activity throughout the channel in the building product industry and its implications. They explore the reasons behind the increase in acquisitions, such as the retirement of older owners and the need for resources and competition. They also discuss the challenges faced by dealers today, including the need for technology and logistics, and the changing expectations of the pro customers. The conversation touches on the impact of acquisitions on manufacturers and the importance of maintaining relationships with dealers. They also highlight the exciting developments in the industry, such as the use digital price tags and the likely benefits of consolidation for dealers.
Chapters
00:00 Introduction and Overview of M&A Activity
03:05 Drivers of M&A Activity
07:39 Challenges Faced by Dealers
13:18 Impact of Acquisitions on Manufacturers
18:11 Exciting Developments in Technology
20:06 Benefits of Consolidation for Dealers
Top Takeaways
Mergers and acquisitions among building product dealers and distributors has been very active in recent years and shows no signs of slowing. This Shop Talk is with Craig Webb of Webb Analytics to dissect what the M&A activity means to manufacturers, contractors, and the supplier community. Some of the takeaways from our conversation:
- SRS was a major acquisition that accounts for the majority of acquired locations. 149 greenfield openings this year, which is ahead of 2023.
- Dealer demos are changing, they are aging out – many dealers are retiring, existing, so many are friendly transaction.
- The challenges and requirements to compete continue to grow in complexity and cost, driving some to evaluate the need to exit.
- Technology is becoming a critical necessity to meet changing contractor needs and can allow dealers to support pros how they prefer.
- Staffing continues to be a challenge for dealers, and those dealers that aren’t able to support at a local level may find challenges in retaining loyal customers.
- Building product manufacturers should be thinking more about logistics and relationships, and work to understand locations driving transactions.
- Manufacturers should have emphasis on dealer connectivity to drive business through supplier networks.
- Technology may continue to be a driving force of dealer activity and may very well be the backbone for solution customer need.
