Private Equity in Roofing: Why Roofing Acquisitions are Booming

The roofing industry is experiencing an unprecedented wave of private equity investment that shows no signs of slowing down.

In board rooms across the country, investment committees are approving acquisition strategies focused specifically on roofing services companies, creating what industry insiders describe as the most seller-friendly market in decades.

This surge isn’t happening by accident.

A perfect storm of market conditions has converged to make roofing businesses particularly attractive acquisition targets: stable growth projections, aging infrastructure, increasing valuations, fragmented competition, and recession-resistant revenue streams. For roofing company owners who have spent years or even decades building their businesses, this convergence has created a rare window of opportunity to exit at premium valuations.

The numbers tell a compelling story.

Roofing industry M&A deals have increased by a staggering 116.7% over the past six years. The pace of acquisitions shows no signs of slowing in 2025. Recent transaction data reveals acquisitions occurring at an almost weekly cadence, with at least 19 roofing companies changing hands in just the first quarter of 2024. This maintains the robust pace set in previous years, indicating another strong year for industry consolidation.

What’s particularly notable is the diversity of buyers entering the space. The transaction landscape includes:

• Large private equity firms like Morgan Stanley Capital Partners (Allstar Construction)
• Middle-market PE firms such as Bertram Capital (Ridgeline Roofing) and Alpine Investors (Vertex Service Partners)
• Strategic buyers including FirstService Corporation (Roofing Corp of America)
• Industry-focused platforms making tuck-in acquisitions

Additionally, private equity has already proven its ability to transform similar industries, such as HVAC and landscaping, giving them confidence and expertise to replicate that success in roofing. For investors, roofing isn’t just another market—it’s a logical next step in their strategy to build scalable, high-performing businesses.

This article examines why private equity firms are aggressively targeting roofing companies, what makes a roofing business attractive to buyers, and why the current market conditions present an exceptionally favorable opportunity for owners considering how to exit a roofing business.

Roofing Market Size and Growth Trajectory

The roofing services industry represents a substantial and growing segment of the U.S. economy that private equity investors simply can’t ignore.

According to recent market analysis, the U.S. roofing services market was valued at $27.5 billion in 2023 and is projected to grow at a compound annual growth rate (CAGR) of 4.5%, reaching $34.3 billion by 2028. This steady growth trajectory provides the stable foundation that private equity firms seek when deploying capital.

What makes this market particularly appealing is its position within the broader home services ecosystem. Roofing serves as a critical component of the massive $679 billion home services industry, offering investors the dual benefits of specialized expertise and essential service demand. 

Unlike discretionary home improvement categories, which fluctuates with economic cycles, 64% of all roofing services are performed on existing buildings—maintenance, repair, and replacement work that cannot be indefinitely postponed. This high percentage of aftermarket service work provides recession resistance that few other construction-adjacent industries can match.

What truly differentiates roofing from other construction sectors is the dual-trigger nature of demand.

Beyond the predictable lifecycle replacement cycle (typically 20-30 years depending on materials), roofing services experience significant demand surges following severe weather events. This creates both a baseline of predictable replacement work and opportunistic revenue spikes following storms, hail, and wind damage—a risk-balanced revenue profile that sophisticated investors find particularly attractive.

For private equity firms analyzing potential investments, these market fundamentals tick all the boxes:

1. Significant scale
2. Steady growth
3. Recession-resistant demand
4. Multiple revenue drivers.

Combined with the industry’s fragmentation (which we’ll explore further), these characteristics make roofing services an ideal private equity target in today’s investment climate.

Structural Industry Factors Driving PE Interest

Beyond market size and valuation trends, the roofing industry possesses several structural characteristics that make it uniquely attractive to private equity investors. These fundamental attributes create the perfect environment for PE’s preferred consolidation strategies.

Perhaps the most compelling opportunity for private equity lies in the industry’s remarkable fragmentation.

Despite recent consolidation efforts, the top five players in the roofing services market control less than 10% of total market share. This level of fragmentation is rare in mature industries of this size.

Looking closer at specific companies, the largest player—Tecta America Corp—holds just 1.7% market share with $960.2 million in revenue. CentiMark Corporation follows at 1.4%, Baker Roofing at 0.5%, and Nations Roof at 0.3%. The remaining 96.1% of the market is divided among thousands of small to mid-sized operators, most serving limited geographic areas.

This fragmentation creates ideal conditions for private equity’s classic “roll-up” strategy—acquiring multiple smaller businesses, integrating them into a unified platform, and extracting value through economies of scale, operational improvements, and increased market power.

Geographic Concentration Opportunities

The roofing industry’s geographic distribution offers another structural advantage for strategic acquirers.

The Southeast region dominates the market, with Florida alone generating $6.7 billion in annual revenue through 6,397 businesses. This regional concentration creates natural acquisition clusters where investors can build market-dominant positions.

As one PE-backed platform executive noted in feedback to investment bankers: “In seasonally cyclical roofing service businesses, having multiple locations across geographies diversifies revenue streams and risk.”

This explains why many PE firms are building regional strongholds, with companies like Northpoint Roofing Systems (backed by Halmos Capital) focusing on states like Georgia, Alabama, Connecticut, New Hampshire, Florida, and Tennessee.

Low Barriers to Operational Improvement

Many local and regional roofing businesses have been family-owned for generations, operating with traditional management practices rather than sophisticated business systems.

This creates substantial opportunity for operational improvements when acquired by PE-backed platforms, such as:

• Implementing modern technology solutions
• centralizing back-office functions
• optimizing purchasing through scale
• improving marketing effectiveness
• enhancing labor management

This private equity “playbook” can significantly increase margins and growth rates post-acquisition. The typical roofing company maintains a 6.4% profit margin, but industry leaders with scale advantages and operational sophistication often achieve double that figure.

These structural factors—extreme fragmentation, geographic concentration, aftermarket service dominance, and operational improvement potential—create the perfect environment for PE’s value creation playbook. Few industries combine these attributes with the scale and growth trajectory of roofing services, explaining the sector’s unprecedented private equity interest.

Rising Valuation Multiples for Roofing Companies

Perhaps the most compelling evidence of private equity’s growing interest in the roofing sector is found in the steady rise in valuation multiples being paid for quality roofing businesses. This upward trend represents real dollars in the pockets of business owners who decide to sell.

According to recent market analysis, the average EBITDA multiple for roofing businesses has increased significantly from 5.2x (2006-2018) to 6.1x in 2023—representing a meaningful 17.3% increase.

This valuation expansion has occurred during a period when many other sectors have experienced multiple compression, highlighting the unique appeal of roofing companies to institutional investors.

The rising tide hasn’t lifted all boats equally, however. Important differentiators can significantly impact valuation multiples:

Service vs. Product Focus: Private equity investors specifically note that “maintenance and repair businesses bring higher multiples than product or construction companies.” This preference for service-oriented roofing businesses reflects the more stable, recurring revenue streams they generate compared to new construction-dependent models. Service-focused businesses with strong maintenance programs can often command premiums of 1-2x EBITDA over their construction-heavy counterparts.

Multi-Market Presence: The data reveals that if you can prove out greenfield growth and validate 4-12 markets, valuations can increase towards the double-digits. Roofing companies that have successfully expanded beyond their home markets demonstrate scalability that PE firms value tremendously. This proven ability to replicate success across regions suggests a business model that can serve as a platform for aggressive future growth.

Management Team Quality: Investors consistently identify management teams that are eager to grow organically and through M&A as particularly attractive. Companies with leadership teams willing to remain post-transaction and drive continued expansion typically receive higher valuation multiples than those where owners are seeking complete exits.

For context, public market comparisons further illustrate the valuation opportunity. The median EBITDA multiple for publicly traded roofing and building products companies stands at approximately 12.9x, suggesting substantial room for private valuation expansion as consolidation continues and larger platforms emerge.

The Home Depot’s recent acquisition of SRS Distribution for $18.25 billion represents another valuation benchmark, albeit for a distribution rather than service business. This transaction signals institutional confidence in the sector’s long-term prospects and suggests continued upward pressure on valuation multiples throughout the ecosystem.

What does this trend mean for roofing business owners?

Simply put, companies that would have sold for 5x EBITDA a decade ago might command 6-7x multiples today, with well-positioned businesses potentially reaching 8-10x or higher. For a business generating $2 million in annual EBITDA, this multiple expansion could translate to an additional $2-4 million in transaction value—a meaningful premium that directly benefits selling shareholders.

As consolidation continues and strategic buyers gain scale advantages, the competition for quality acquisition targets is likely to intensify further, potentially driving additional multiple expansion for the most attractive remaining independent operators.

Is Now the Best Time to Sell?

The evidence is clear: we’re witnessing an unprecedented alignment of factors creating optimal conditions for roofing company owners considering an exit. The convergence of rising valuations, aggressive acquisition activity, favorable external drivers, and intense competition among well-funded buyers has created what many industry experts consider a “seller’s market” unlike any previously seen in the roofing sector.

For business owners who have spent years or even decades building their companies, this window presents a rare opportunity to monetize that hard work at premium valuations. 

At Axia Advisors, we specialize in representing roofing companies in M&A transactions. Our deep industry expertise and extensive relationships with active PE firms and strategic buyers allow us to position your business for maximum value. We’ve helped numerous owners successfully navigate this complex landscape, achieving premium valuations that exceed industry averages.

The question isn’t whether consolidation will continue—it’s whether you’ll participate in this wave on favorable terms or compete against the emerging giants as an independent operator. For many owners, the prudent strategy is to explore options now, while multiple buyers actively compete for quality acquisition targets.

If you’re considering your exit options, even if just for future planning, we invite you to schedule a confidential consultation with our M&A specialists. Our team can provide a no-obligation valuation assessment and discuss potential strategies to maximize your company’s worth in today’s seller-friendly market.

Contact Axia Advisors today to learn how we can help you capitalize on this historic opportunity in the roofing industry M&A market.