What to watch as the rest of 2022 unfolds

By Kevin Yanik| June 22, 2022

The attitude of modern workers is much different than the attitude of the workers the industry attracted in the past. But the industry must effectively adjust.

“I walked the floor at World of Asphalt [and] AGG1,” Reddin says. “I don’t make anything and I don’t buy anything, but I was amazed at how much of what I’ll called ‘technologies’ there were compared to say 10 or 15 years ago.

“We’re going to have to make this [industry] look like fun,” he adds. “It’s going to have to look like a computer game. It’s going to have to have some tech. We’re going to have to find a way to either embrace some work from home or four-day weeks – or something.”

Mergers and acquisitions

One area that illustrates the robust nature of the construction materials industry in recent years is mergers and acquisitions.

While industry dealmaking came to a screeching halt during the first half of 2020, M&A picked up in the second half of that year and carried into 2021.

“What we’re really seeing is bigger deals,” Reddin says. “How do you move the needle? You get to be one of your top players in the industry – the CRHs, the Vulcans, the Martin Mariettas – on size.”

According to Reddin, CRH has grown by targeting big asphalt paving contractors with aggregates. Vulcan Materials, meanwhile, bought U.S. Concrete last year in a deal reported at $1.2 billion. Martin Marietta has been active of late, too, acquiring Western assets from Lehigh Hanson and Minnesota-based Tiller Corp.

As Reddin describes, the M&A landscape is remarkably different in 2022 than it was six or seven years ago.

“They maybe did 20 deals [then] but they only spent $250 million,” Reddin says. “They’re [now] doing that per deal.”

Reddin says there’s a reason the industry’s top producers approach M&A differently today.

“You want to have a seat when the dust settles and be No. 1 or 2 in your market,” he says. “So they’re taking bigger bites. It’s the same or more deals, but much bigger in terms of dollars.”

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