Private equity funds to hunt construction companies

Last year, the value of M&A transactions on the construction market in Europe amounted to over $53 billion. According to the authors of the first edition of the report entitled “Global construction M&A monitor 2018-2019” by Deloitte, an accounting firm, more transactions concerned local markets than acquisitions at an international level. Almost a third of the transactions involved the takeover of an entity from another industry by a construction company.

“In Europe, as in the world, the M&A trend in the construction sector is to stabilize sentiment after a period of growth and focus on transactions in local markets. In recent years, cross-border acquisitions accounted for an average 40% of merger and acquisition market value, while in 2018 it was only 30%,” Maciej Krasoń, partner, leader of the real estate and construction sector in Deloitte in Poland and Central Europe, said.

The authors of the Deloitte report – analyzing the situation in individual countries – note that after the weak period of 2015-2016 the construction market in Poland recorded a rebound in 2017-2018.

Due to the significant increase in material prices and labor costs in 2018, many companies recorded worse financial results at the level of net profit and EBITDA (operating profit before depreciation).

(WBJ)