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BUSINESS VALUATION & FINANCIAL ADVISORY SERVICES
Construction Overview Construction & National GDP 1Construction & National Unemployment 2Value of Construction Put-in-Place 3
Sector Focus: Residential Construction 4
30-Year Mortgage Rate 5 NAHB Indices 6Housing Starts & Permits 7New and Existing Home Sales &
Months of Supply 9
Sector Round-up Building Materials 10Roads, Bridges & Highways 11Nonresidential Construction 12
Mergers and Acquisitions 13
Bellwether Stocks & Industry Participants 14
About Mercer Capital 17
www.mercercapital.com
VALUE FOCUS
First Quarter 2016
Construction & Building Materials
SEGMENT FOCUS Residential Construction
EXECUTIVE INDUSTRY TRENDS
• The Fed’s raising of rates has not had a negative impact on the
industry as previously expected
• Construction activity increased steadily for both residential and
nonresidential put-in-place
• The FAST Act has not had immediate impact on transportation
activity, but should have an effect starting in the second half of
2016
• 30-Year Mortgage rates and 10-Year Treasury yields dropped 27
and 35 BPS this quarter, respectively, aiding additional investment
• Home sales have picked up due to high demand
© 2016 Mercer Capital // www.mercercapital.com 1
Mercer Capital’s Value Focus: Construction & Building Materials First Quarter 2016
GDP rose 3.3% over the past twelve months, reaching the higher end of an ideal range of 2% to 4% annually. Over the
past ten years, construction has averaged 4.1% of national GDP, and it accounted for 4.2% of GDP this past quarter.
Construction lagged behind the rest of the economy, particularly in the years following the decline of 2009, but steadily
recovered, marked by a 9.7% year-over-year increase in Construction GDP. Activity is expected to continue to improve
going forward.
$0 $100 $200 $300 $400 $500 $600 $700 $800
-6.0%
-4.0%
-2.0%
0.0%
2.0%
4.0%
2007
Q1 Q2 Q3 Q4
2008
Q1 Q2 Q3 Q4
2009
Q1 Q2 Q3 Q4
2010
Q1 Q2 Q3 Q4
2011
Q1 Q2 Q3 Q4
2012
Q1 Q2 Q3 Q4
2013
Q1 Q2 Q3 Q4
2014
Q1 Q2 Q3 Q4
2015
Q1 Q2 Q3 Q4
2016
Q1
GD
P ($Billions)
Ann
ualiz
ed R
eal G
row
th R
ate
Quarterly Growth Average Quarterly Growth GDP (Current Dollars) Source: Bureau of Economic Analysis
-6%
-4%
-2%
0%
2%
4%
6%
National Construction
Construction OverviewConstruction & National GDP
Construction Gross Domestic Product
% Change in GDP
Source: U.S. Bureau of Economic Analysis
Construction GDP
Period % Change
Q-o-Q 2.4%
Y-o-Y 9.7%
National GDP
Period % Change
Q-o-Q 0.4%
Y-o-Y 3.3%
© 2016 Mercer Capital // www.mercercapital.com 2
Mercer Capital’s Value Focus: Construction & Building Materials First Quarter 2016
According to the Federal Reserve, the current unemployment rate is 5.0%. This represents a decrease from 5.5% a
year ago.
Construction is a cyclical and seasonal industry, so its unemployment rate is more volatile. The major contributing
factor to the seasonal nature of the construction industry is the weather. Production of materials and projects in general
decrease during the cold, winter months. The construction unemployment rate is currently 8.7%, down from 9.5% a
year ago. While the current level does not appear, it is expected to decrease as the year progresses and the weather
improves. Year-over-year rates have decreased in every month since 2010, so the rate could fall lower than 5.0% by
September of this year. Lower unemployment rates suggest an increase in activity within the industry.
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
National Construction
Source: U.S. Bureau of Labor Statistics
Note: The national unemployment rate is seasonally adjusted, but the construction unemployment rate is not in order to show seasonality and recent trends.
Construction OverviewConstruction & National Unemployment
Unemployment Rate
© 2016 Mercer Capital // www.mercercapital.com 3
Mercer Capital’s Value Focus: Construction & Building Materials First Quarter 2016
The value of construction put-in-place is the total cost of construction on a job site for a particular period. The US
Census Bureau tracks this data and reports the total monthly. These costs include, but are not limited to, the building
materials, labor, profit, engineering, interest, and taxes.
Year-over-year put-in-place construction has increased by 12.9% for residential and by 9.3% for nonresidential. This
past quarter shows a similar pattern with residential construction increasing by 4.0% and nonresidential construction
increasing by 3.6%. This activity is expected to continue as construction levels strengthen. Higher levels of put-in-place
construction suggest an increase in activity within the industry.
Construction OverviewValue of Construction Put-in-Place
$0$100$200$300$400$500$600$700$800
$Billions
Residential Nonresidential
Source: U.S. Census Bureau
Value of Construction Put-in-Place
Residential
Period % Change
Q-o-Q 4.0%
Y-o-Y 12.9%
Nonresidential
Period % Change
Q-o-Q 3.6%
Y-o-Y 9.3%
Source: U.S. Census Bureau
© 2016 Mercer Capital // www.mercercapital.com 4
Mercer Capital’s Value Focus: Construction & Building Materials First Quarter 2016
The interest rate hike of 25 basis point by Federal Reserve in December 2015 caused some to worry about its effects
on the homebuilding industry. Despite some economists prediction of a subsequent economic downturn, the industry
has proceeded with cautious optimism and seems to have continued to strengthen. The Fed’s tightening of monetary
policy represents a potential rise in financing costs. Rate hikes typically harm the homebuilding industry, but concerns
have largely been mollified by low 30-year mortgage rates, shrinking unemployment, mild wage growth, and growing
consumer confidence.
General economic conditions have been improving, causing an increase in investment in residential construction, but
this growth has been stunted by a short supply of labor and housing. Construction unemployment levels are returning
to low levels, but the overall level of employment in the industry is depressed because the recession forced many firms
and workers out of the market. A lack of workers has caused wages to increase as an input cost, but not to a detrimental
level at this point.
Tight labor conditions have caused pent-up demand for houses and, therefore, home prices have increased. These
factors have led homebuilders to shift focus away from maximizing the number of homes built and sold. Instead, they
are focusing on more easily controlled financial metrics such as growth rate, gross margins, average sale price (ASP),
absorption rates, and SG&A. This sharply contrasts the rapid expansion that categorized the period leading up to the
recession, indicating the market is poised for slow and steady long-term growth.
Homebuilders secured cheap land in the wake of the financial crisis. In recent years, firms have shifted away from
aggressive land acquisition towards smaller projects with shorter turnover rates. Financial flexibility has become a
key concern for major players in the industry who are not interested in tying up capital as the market emerges from
its struggles. Companies are increasingly using call options as part of their land acquisition strategy. They pay a small
amount to lock in prices, and then purchase lots as prices increase. This strategy allows home builders flexibility, while
enabling them to react quickly to the market.
Homebuilders are also focusing their attention to where demand is highest, particularly near urban areas with high job
growth. As people move back into cities, closer-in and infill construction has become increasingly popular. In addition,
people are concerned with the cost of housing. Rising ASPs have led people to choose what are typically considered
entry-level homes. Between rising costs and the necessity for city proximity, rent-to-ownership rates have risen in recent
years. As millennials age, however, they are expected to shift back to home ownership, representing an opportunity for
expanded growth in the residential construction industry.
Sector FocusResidential Construction
© 2016 Mercer Capital // www.mercercapital.com 5
Mercer Capital’s Value Focus: Construction & Building Materials First Quarter 2016
The 30-year mortgage rate is the most common financing tool home buyers use in the U.S. When mortgage rates
decrease, the overall cost to the consumer decreases, so demand for homes increases. Mortgage rates have been
somewhat volatile, but overall have been decreasing since a dramatic increase in June of 2013. If this trend continues,
even more homebuyers are likely to enter the market.
Residential Construction30-Year Mortgage Rate
30-Year Mortgage Rate
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
Source: Freddie Mac
30-Year Mortgage Rate
Period Change
Q-o-Q -27 BPS
Y-o-Y -8 BPS
© 2016 Mercer Capital // www.mercercapital.com 6
Mercer Capital’s Value Focus: Construction & Building Materials First Quarter 2016
The National Association of Home Builders conducts two separate surveys, the Housing Market Index (HMI) and the
Remodeling Market Index (RMI), to measure confidence in the home building industry. Respondents rate their activity
on a scale from 1-100 with 50 being average. The HMI is produced monthly and asks respondents to rate market
conditions both at present and looking forward six months. While the monthly index has recently gone up or down with
seemingly no pattern, it is encouraging that it has been above 50 for the past seven quarters, including a ten-year high
in October 2015. The RMI is produced quarterly and asks respondents to rate their work volume as either higher or lower
than the previous quarter. 1Q16 was the lowest in two years, though it should be noted the first quarter has been the
lowest in each of the past three years, so it will likely increase coming out of the winter months. The index has remained
above the average of 50 for the past three years, which is an additional positive sign.
0
10
20
30
40
50
60
70
80
90
100
HMI RMI
Source: National Association of Home Builders
Note: RMI is measured quarterly and approximatedon a monthly basis using a straight-line approach.
Residential ConstructionNAHB Indices
NAHB Housing Market and Remodeling Market Indices
NAHB HMI
Period % Change
Q-o-Q -3.3%
Y-o-Y 11.5%
NAHB RMI
Period % Change
Q-o-Q -6.6%
Y-o-Y -4.9%
© 2016 Mercer Capital // www.mercercapital.com 7
Mercer Capital’s Value Focus: Construction & Building Materials First Quarter 2016
Building permits and housing starts are two important indicators for the home building industry. Both reflect demand,
consumer confidence, and the feasibility of financing such construction projects. Building permits can be issued and
then shelved by builders; therefore, housing starts are a better focused measure of current activity within the industry.
Housing permits and housing starts have felt the effect of the housing bubble with a steep drop of nearly 75% in three
years from Q1 2006 to Q1 2009. Both of these have recovered somewhat as the economy has gotten back on track, but
they are unlikely to reach prerecession highs, which were artificially high due to the housing bubble. As seen in the chart
and tables below, all levels of permits and starts have increased over the past year despite declining in this past quarter.
Residential ConstructionHousing Starts & Permits
Seasonally Adjusted Annualized Rates of New Housing Starts and Building Permits
Millions of Units
Private Housing Starts
Period % Change
Q-o-Q -6.0%
Y-o-Y 14.2%
Single Family Starts
Period % Change
Q-o-Q -0.7%
Y-o-Y 22.6%
Private Building Permits
Period % Change
Q-o-Q -10.6%
Y-o-Y 3.7%
Single Family Building Permits
Period % Change
Q-o-Q -1.1%
Y-o-Y 12.8%
0.2
0.4
0.6
0.8
1.0
1.2
1.4
1.6
1.8
2.0
2.2
2.4
Dec-00
Dec-01
Dec-02
Dec-03
Dec-04
Dec-05
Dec-06
Dec-07
Dec-08
Dec-09
Dec-10
Dec-11
Dec-12
Dec-13
Dec-14
Dec-15
Private Housing Starts Single Family Starts Private Building Permits Single Family Building Permits
Source: U.S. Census Bureau Note: Permits at a given date are generally a leading indicator of future starts. Beginning with January 2004, building permit data reflects the change to the 20,000 place series.
Private Housing
Single Family
Housing
© 2016 Mercer Capital // www.mercercapital.com 8
Mercer Capital’s Value Focus: Construction & Building Materials First Quarter 2016
Housing starts increased notably in 2015 compared to 2014. The biggest jump was in the Northeast, which increased
by 26.0%. The only region where housing starts decreased was the Midwest. The South remains the area with the most
starts; there were more than 550,000 housing starts in the South, more than double the next highest, which was the
West with over 265,000 starts.
Single family housing starts increased for every region at varying levels. The Midwest had the slowest growth at 1.5%,
and the West had the largest increase year-over-year with 13.9%. The South continues to have the most single family
housing starts, but the Midwest maintains the highest percentage of its housing starts devoted to single families.
Residential ConstructionHousing Starts & Permits(continued)
Regional Housing Starts
Period
Y-o-Y
% Change
Midwest -6.2%
Northeast 26.0%
South 11.9%
West 12.9%
Regional Housing Starts
Single Family
Period
Y-o-Y
% Change
Midwest 1.5%
Northeast 7.0%
South 11.9%
West 13.9%
2015 Housing Starts by Census Region
Thousands of Units
2015 Single Family Housing Starts by Census Region
Thousands of Units
West265.4
West165.1
Midwest152.5
Midwest107.3
South555.6
South387.0
Northeast138.1
Northeast54.8
© 2016 Mercer Capital // www.mercercapital.com 9
Mercer Capital’s Value Focus: Construction & Building Materials First Quarter 2016
Home sales, both new and existing, give a sense of the market for people looking to buy houses. Sales track the number
of homes actually sold in a month. Months of supply is another measure of the home buying market; it shows how long it
would take for all of the homes currently on the market to be purchased. It is alternatively known as the absorption rate.
Four to five months is considered average, with lower levels signifying a pricing advantage for sellers and vice versa.
Supply and sales have both returned to relatively normal levels. While supply has dropped down to prerecession levels,
home sales, particularly new home sales, have failed to do so.
Residential ConstructionNew and Existing Home Sales & Months of Supply
0.0
2.0
4.0
6.0
8.0
10.0
12.0
14.0
0.0
0.2
0.4
0.6
0.8
1.0
1.2
Mon
ths
of S
uppl
y
Hom
es S
old
(Mill
ions
)
Sold Supply
0.02.04.06.08.010.012.014.0
0.0
2.0
4.0
6.0
8.0
Mon
ths
of S
uppl
y
Hom
es S
old
(Mill
ions
)
Sold Supply
New Homes Sold and Months of Supply
Existing Homes Sold and Months of Supply
New Homes Sold
Period % Change
Y-o-Y 8.4%
Existing Homes Sold
Period % Change
Y-o-Y 2.1%
Months of Supply
Period % Change
Y-o-Y 10.0%
Sources: St. Louis Fed, U.S. Bureau of the Census, National Association of Realtors
© 2016 Mercer Capital // www.mercercapital.com 10
Mercer Capital’s Value Focus: Construction & Building Materials First Quarter 2016
Construction aggregates (asphalt, cement, and ready-mix concrete) are all essential elements to building and
maintaining roads and highways. Companies that deal in building materials sell a sizeable amount of their products
to publicly funded projects. Therefore, government funding is an important driver for the industry, and companies
benefit when public spending increases. According to the chart below, Government Consumption and Investment (GCI)
has increased modestly by 0.3% over 4Q15 and 1.4% over 2015. The FAST Act has not had an immediate effect on
government spending, but it should increase its impact in the coming quarters.
In recent M&A news, Martin Marietta continued its acquisition activity in the West by acquiring Front Range Aggregates,
which is based in Colorado with total revenue of $310 million. This comes about six months after divesting California
assets that they had acquired in 2013 from TXI. Summit Materials also continued their growth strategy that relies largely
on acquisitions, paying $252 million for both Boxley Materials and American Materials, which operate in Virginia and the
Carolinas, respectively.
$2,650$2,700$2,750$2,800$2,850$2,900$2,950$3,000$3,050$3,100$3,150
$Billions
Sector Round-upBuilding Materials
Government Consumption and Investment
Government Consumption
and Investment
Period % Change
Q-o-Q 0.3%
Y-o-Y 1.4%
Sources: St. Louis Fed, U.S. Bureau of Economic Analysis
© 2016 Mercer Capital // www.mercercapital.com 11
Mercer Capital’s Value Focus: Construction & Building Materials First Quarter 2016
The yield on 10-Year Treasury Bonds can indirectly affect the road contracting industry. Higher interest rates make
construction projects more expensive to undertake. When yields on the 10-Year Treasury are low and stable, the
construction industry experiences increased investment and volume. As seen in the chart below, the 10-year yield has
decreased in the past quarter, causing a year-over-year decline as well. The strength of the dollar has caused concern
amongst the Fed in raising rates, but this usually has less of a long-term impact because many other levers affect the
dollar. The Fed’s interest in encouraging investment since the recession has depressed yields for a long time, but its
raising of the Fed funds rate indicates a shift in this strategy. This change could cause higher borrowing costs and a
potential headwind for the industry.
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
Sector Round-upRoads, Bridges & Highways
Yield on 10-Year Treasury
Yield on 10-Year Treasury
Period % Change
Q-o-Q -35 BPS
Y-o-Y -15 BPS
Sources: St. Louis Fed, Board of Governors of the Federal Reserve (US)
© 2016 Mercer Capital // www.mercercapital.com 12
Mercer Capital’s Value Focus: Construction & Building Materials First Quarter 2016
Corporate profit is essential for companies not only to survive, but to grow and expand. When corporate profit increases,
companies are more willing and able to open new branches and divisions of business. These additions lead to more
commercial construction. According to the chart below, corporate profit increased this quarter despite being down
overall for the year. While conditions are improving domestically, global macroeconomic conditions are limiting growth in
corporate profit, which is causing a mixed signal for nonresidential construction.
$0$200$400$600$800
$1,000$1,200$1,400$1,600$1,800$2,000
$Billions
Sector Round-upNonresidential Construction
Corporate Profit
Corporate Profit
Period % Change
Q-o-Q 1.9%
Y-o-Y -3.6%
Source: St. Louis Federal Reserve
© 2016 Mercer Capital // www.mercercapital.com 13
Mercer Capital’s Value Focus: Construction & Building Materials First Quarter 2016
Announce Date
Industry Subsector Target/Issuer Buyers/Investors Description
March 21 Nonresidential Ardent Services, LLC EMCOR Group Inc.Provides electrical and instrumentation services to the energy infrastructure market in the US.
March 21 NonresidentialRabalais Constructors, LLC
EMCOR Group Inc.Provides electrical and instrumentation services to the energy infrastructure market in the US.
February 23 Building MaterialsBoxley Materials Company, Inc.
Summit Materials, Inc.Product lines include ready-mixed concrete, crushed stone, asphalt, and other construction materials.
February 11 Building MaterialsAmerican Materials Company
Summit Materials, Inc.Manufactures and markets sand and gravel to customers in the Carolinas.
February 9 Building MaterialsFront Range Aggregates LLC
Martin Marietta Materials, Inc.
Engages in production and supply of construction aggregates and landscaping materials in Colorado.
January 13 Nonresidential Weatherly Inc. KBR, Inc. Builds nitric acid plants.
January 13 Nonresidential Plinke GmbH KBR, Inc. Designs and manufactures acid processing plants.
January 13 NonresidentialChematur Ecoplanning Oy
KBR, Inc. Designs, develops, and constructs processing plants for the processing and chemical industry.
January 8 Home BuildingAcadia Homes & Neighborhoods LLC
Taylor Morrison Home Corporation
Offers homebuilding services based in the Atlanta area.
Source: Capital IQ
Mergers and Acquisitions
© 2016 Mercer Capital // www.mercercapital.com 14
Mercer Capital’s Value Focus: Construction & Building Materials First Quarter 2016
Ticker Exchange
Stock Price at 3/31/16
LTM Price Range
Enterprise Value
LTMLTM
Margin EBITDA/
Rev.
LTM MultipleForward Multiples
High Low Rev. EBITDA EV/Rev. EV/EBITDAEV/
EBITDA
Residential
Beazer Homes USA Inc. BZH NYSE $8.72 $21.19 $6.07 $1,602.00 $1,792.35 $37.97 2% 1.0x 30.4x 12.6x
Comstock Holding Companies, Inc. CHCI Nasdaq 1.79 6.65 1.40 47.80 60.77 (0.36) -1% 1.3x NM 0.0x
DR Horton Inc. DHI NYSE 30.23 33.10 22.97 13,646.21 11,307.60 1,308.80 12% 1.2x 10.9x 9.0x
Hovnanian Enterprises Inc. HOV NYSE 1.56 3.76 1.19 2,252.63 2,278.37 90.85 4% 1.0x 24.4x 10.2x
KB Home KBH NYSE 14.28 17.42 9.04 3,647.33 3,130.28 168.95 5% 1.2x 22.0x 13.7x
Lennar Corporation LEN NYSE 48.36 56.04 37.14 16,550.51 9,823.53 1,200.30 12% 1.6x 12.3x 10.0x
LGI Homes, Inc. LGIH Nasdaq 24.21 36.07 16.27 766.27 672.01 87.61 13% 1.2x 9.2x 7.2x
MDC Holdings Inc. MDC NYSE 25.06 31.23 19.28 1,967.95 1,928.29 114.64 6% 1.0x 17.1x 12.3x
NVR, Inc. NVR NYSE 1,732.40 1,820.00 1,292.11 7,016.74 5,355.36 687.84 13% 1.3x 10.7x 9.5x
PulteGroup, Inc. PHM NYSE 18.71 22.95 14.61 8,698.68 6,281.24 866.63 14% 1.4x 9.7x 8.1x
Toll Brothers Inc. TOL NYSE 29.51 42.19 23.75 8,012.87 4,246.36 503.01 12% 1.9x 15.2x 8.4x
Median $24.21 $31.23 $16.27 $3,647.33 $3,130.28 $168.95 12% 1.2x 13.7x 9.5x
Average $175.89 $190.05 $131.26 $5,837.18 $4,261.47 $460.57 8% 1.3x 16.2x 9.2x
All figures reported in millions, except per share data
Source: Capital IQ
Bellwether Stocks & Industry Participants
© 2016 Mercer Capital // www.mercercapital.com 15
Mercer Capital’s Value Focus: Construction & Building Materials First Quarter 2016
Ticker Exchange
Stock Price at 3/31/16
LTM Price Range
Enterprise Value
LTMLTM
Margin EBITDA/
Rev.
LTM MultipleForward Multiples
High Low Rev. EBITDA EV/Rev. EV/EBITDAEV/
EBITDA
Building Materials
Eagle Materials Inc. EXP NYSE $70.11 $88.81 $45.03 $3,959.43 $1,143.49 $328.86 29% 3.5x 11.2x 9.6x
Martin Marietta Materials, Inc. MLM NYSE 159.51 178.67 108.31 11,990.01 3,370.20 825.59 24% 3.6x 15.2x 12.3x
MDU Resources Group Inc. MDU NYSE 19.46 23.12 15.58 5,826.27 4,234.35 504.31 12% 1.4x 11.6x 10.0x
Summit Materials, Inc. SUM NYSE 19.45 28.57 13.12 2,245.68 1,432.30 283.68 20% 1.6x 7.9x 6.3x
US Concrete, Inc. USCR Nasdaq 59.58 63.67 32.58 1,173.65 1,048.42 127.38 12% 1.2x 9.9x 7.4x
Vulcan Materials Company VMC NYSE 105.57 106.84 78.83 15,896.33 3,545.62 897.97 25% 4.6x 19.1x 14.8x
Cemex SAB de CV (ADR) CX NYSE N/A N/A N/A N/A N/A N/A 19% 2.0x 10.3x 0.0x
CRH PLC (ADR) CRH NYSE N/A N/A N/A N/A N/A N/A 9% 1.2x 12.4x 0.0x
HeidelbergCement HEI GR N/A N/A N/A N/A N/A N/A 17% 1.5x 8.1x 7.2x
LafargeHolcim Group LHN VTX N/A N/A N/A N/A N/A N/A 5% 2.1x 37.2x 8.3x
Median $64.85 $76.24 $38.80 $4,892.85 $2,401.25 $416.58 18% 1.8x 11.4x 7.9x
Average $72.28 $81.61 $48.91 $6,848.56 $2,462.40 $494.63 17% 2.3x 14.3x 7.6x
Roads, Bridges, and Highways
Granite Construction Inc. GVA NYSE $47.80 $47.99 $28.45 $1,687.73 $2,390.23 $153.64 6% 0.7x 10.2x 8.6x
Sterling Construction Co STRL Nasdaq 5.15 6.66 3.05 118.93 632.48 13.10 2% 0.2x 26.6x 4.5x
Tutor Perini Corporation TPC NYSE 15.54 24.74 10.16 1,497.74 4,939.38 170.97 3% 0.3x 10.3x 6.0x
Median $15.54 $24.74 $10.16 $1,497.74 $2,390.23 $153.64 3% 0.3x 10.3x 6.0x
Average $22.83 $26.46 $13.89 $1,101.47 $2,654.03 $112.57 4% 0.4x 15.7x 6.4x
All figures reported in millions, except per share data
Source: Capital IQ
Bellwether Stocks & Industry Participants
Note: CX, CRH, HEI, and LHN report in foreign currency. Margin and multiples unaffected and shown for analysis.
© 2016 Mercer Capital // www.mercercapital.com 16
Mercer Capital’s Value Focus: Construction & Building Materials First Quarter 2016
Ticker Exchange
Stock Price at 3/31/16
LTM Price Range
Enterprise Value
LTMLTM
Margin EBITDA/
Rev.
LTM MultipleForward Multiples
High Low Rev. EBITDA EV/Rev. EV/EBITDAEV/
EBITDA
Nonresidential
Aecom Technology Corporation ACM NYSE $30.79 $35.40 $22.80 $8,707.61 $17,952.16 $1,014.53 6% 0.5x 8.0x 8.1x
Chicago Bridge and Iron Company N.V. CBI NYSE 36.59 59.45 31.30 5,823.01 12,471.49 1,154.60 9% 0.5x 5.1x 6.2x
Dycom Industries Inc. DY NYSE 64.67 90.82 45.45 2,725.23 2,289.58 307.29 13% 1.2x 8.9x 6.9x
EMCOR Group Inc. EME NYSE 48.60 52.37 40.98 2,869.84 6,874.51 364.14 5% 0.4x 7.7x 7.4x
Fluor Corporation FLR NYSE 53.70 62.26 39.48 7,434.10 17,989.29 1,075.81 6% 0.4x 5.8x 6.1x
Jacobs Engineering Group Inc. JEC NYSE 43.55 48.25 34.76 5,582.25 11,775.76 714.99 6% 0.5x 7.8x 8.1x
MasTech, Inc. MTZ NYSE 20.24 21.52 12.44 2,635.06 4,179.29 232.37 6% 0.6x 10.9x 6.3x
Quanta Services, Inc. PWR NYSE 22.56 30.61 16.77 3,860.35 7,424.79 457.67 6% 0.5x 8.0x 6.8x
Median $40.07 $50.31 $33.03 $4,721.30 $9,600.27 $586.33 6% 0.5x 7.9x 6.9x
Average $40.09 $50.09 $30.50 $4,954.68 $10,119.61 $665.18 7% 0.6x 7.8x 7.0x
All figures reported in millions, except per share data
Source: Capital IQ
Bellwether Stocks & Industry Participants
Mercer CapitalConstruction & Building Materials Industry Services
Contact Us
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Reporters requesting additional information or editorial comment should contact Barbara Walters Price at 901.685.2120. Mercer Capital’s Industry Focus is published quarterly and does not constitute legal or financial consulting advice. It is offered as an
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Mercer Capital provides valuation and transaction advisory services to the construction and building materials industries.
Industry Segments
Mercer Capital serves construction industry segments from to commercial and civil to residential. We also serve the
building materials sector from aluminum and steel to brick, glass, and lumber.
Mercer Capital Experience
• Family and management succession planning
• Buy-side and sell-side transaction advisory assistance
• Conflict resolution and litigation support
• Trust and estate planning
• Buy-sell agreement valuation, design, and funding advisory
Contact a Mercer Capital professional to discuss your needs in confidence.
Timothy R. Lee, ASA
901.322.9740
Nicholas J. Heinz
901.685.2120
MERCER CAPITAL
Memphis
5100 Poplar Avenue, Suite 2600
Memphis, Tennessee 38137
901.685.2120
Dallas
12201 Merit Drive, Suite 480
Dallas, Texas 75251
214.468.8400
Nashville
102 Woodmont Blvd., Suite 231
Nashville, Tennessee 37205
615.345.0350
www.mercercapital.com
BUSINESS VALUATION & FINANCIAL ADVISORY SERVICES