The roofing industry is experiencing a dramatic transformation.
What was once a fragmented market of local, family-owned businesses is quickly consolidating as private equity firms and strategic buyers compete for well-run roofing companies across the United States.
For roofing company owners, this shift creates both new opportunities and challenges that weren’t present just a few years ago.
If you own a roofing business, you may have already received calls from interested buyers or noticed competitors being acquired by larger platforms.
Understanding who these buyers are, how they operate, and what they’re looking for can make a tremendous difference in your strategic planning – whether you’re considering selling your roofing company in the near future or simply want to better position your company in this changing market.
How Private Equity Works in the Roofing Industry
Private equity (PE) firms raise money from large investors like pension funds, university endowments, and wealthy individuals. They pool this money into funds that typically range from $300 million to over $2 billion. These funds have a set lifespan, usually 7-10 years.
This timeframe is important because it means PE firms must buy companies, improve them, and then sell them within this period. Unlike family businesses that might stay in the same hands for generations, PE firms always plan to sell the companies they buy.
When PE firms buy roofing companies, they typically use a mix of borrowed money (60-80%) and their own investment funds (20-40%). This approach, called leverage, helps them make more money if things go well, but it also means the business needs to make enough money to pay back the loans.
How They Choose Which Roofing Companies to Buy
When looking for roofing companies to buy, PE firms aren’t just looking at profits. They want businesses with:
- Strong presence in growing markets
- Good reputation in their communities
- Solid safety records
- A mix of different customers rather than depending on just a few
Before buying a company, PE firms conduct thorough research (called due diligence). They look at financial records, operations, market opportunities, customer relationships, and the management team. For roofing companies specifically, they check contractor licenses, insurance history, and how workers are classified, since these can be areas of risk.
Roofing companies typically sell for 4-8 times their annual EBITDA (earnings before interest, taxes, depreciation, and amortization). Larger companies with better systems and stronger growth usually sell for higher multiples.
The Platform Approach: What Happens After They Buy a Roofing Company
After buying a roofing company, PE firms focus on making it bigger and more profitable. A key strategy is the “buy and build” approach – using the first company they buy (called the platform) to acquire other roofing businesses (often called “add-ons”). Successful PE-backed roofing companies often buy 5-10 additional businesses during the investment period.
PE firms usually strengthen the management team, sometimes keeping the original owners in leadership roles, but adding experienced executives. They typically bring in a professional CFO, hire people dedicated to finding more companies to buy, and add regional managers who can maintain local relationships while implementing standard practices.
They also focus on improving operations by:
- Adding software systems for estimating, project management, and customer tracking
- Creating standard processes for safety, quality control, and customer service
- Using their larger size to get better prices on materials and insurance
- Setting up clear performance goals and tracking systems
- Improving marketing and lead generation
Most PE-backed roofing companies try to grow both by expanding to new areas and by adding new services. They often start in one region and gradually expand through acquisitions. Many also add services like siding, gutters, insulation, or solar installation to increase sales to existing customers.
Planning for the Sale
PE firms typically own roofing companies for 3-7 years before selling them. Throughout this period, they work to build businesses that will attract the next buyer, whether that’s a larger PE firm, a big corporate buyer, or rarely, public investors through a stock offering.
The exit plan often depends on how big the company has grown. Smaller regional companies might be sold to mid-sized PE firms looking to expand, while larger national companies often attract interest from major corporate buyers. Very successful companies might eventually go public, though this isn’t common in roofing.
For roofing company owners thinking about selling, it’s important to understand this cycle. The right PE partner should have goals and plans that match what you want for your business, your team, and your legacy. While some of the financial details might seem complex, the basic model is straightforward: PE firms buy good businesses, make them bigger and more profitable, then sell them for more than they paid.
Private Equity Platforms in the Roofing Platform Industry
The main trend in the residential roofing industry during the past recent years has been private equity firms creating platform companies that acquire and integrate multiple regional roofing brands.
These platform strategies allow for economies of scale, geographic expansion, and better service offerings while maintaining local brand recognition. Based on our insider knowledge of the market, here are some of the most influential players:
Infinity Home Services
Infinity Home Services stands as a dominant player in the roofing platform space with 26 portfolio brands under management. The platform is backed by a partnership between Freeman Spogli Management Co and LightBay Management LLC, bringing together substantial financial resources and strategic management expertise.
Their aggressive acquisition strategy has created one of the most comprehensive networks of roofing service providers in the industry, offering significant geographic coverage and service diversification.
Vertex Service Partners
Vertex Service Partners represents Alpine Investors’ entry into the roofing sector with 9 portfolio companies. Alpine Investors brings its experience in building service-based platform companies to the roofing industry.
The platform has shown particular strength in residential roofing services and appears to be expanding through strategic regional acquisitions.
All Star Services
All Star Services has established itself as a major contender with 19 portfolio companies. This platform is supported by Morgan Stanley Capital Services, bringing institutional-level investment capital and financial expertise to the roofing sector.
The platform has demonstrated particular strength in consolidating mid-sized regional roofing contractors and creating operational synergies across its network.
Private Equity Partner:
Portfolio Brands:
Omnia Exterior Solutions
Omnia Exterior Solutions has built a significant presence with 12 portfolio brands. CCMP Growth Advisors LLP provides the financial foundation for this expanding platform.
Their strategy appears to balance geographic diversification with selective acquisition of well-established local market leaders.
BlueThread Services
BlueThread Services has established a growing platform with 8 portfolio brands. Seaside Equity Partners provides the capital and strategic direction for this emerging platform.
The platform appears to be pursuing targeted regional growth with an emphasis on quality over quantity in its acquisition strategy.
Industry Trends
This data reveals many important trends in the roofing platform industry:
- Private Equity Dominance: Nearly every major roofing platform is backed by private equity, highlighting the financial sector’s recognition of consolidation opportunities in the fragmented roofing market.
- Varying Platform Strategies: While some platforms (like Infinity Home Services) pursue aggressive acquisition strategies with large portfolios, others maintain more focused approaches with fewer, potentially larger acquisitions.
- Geographic Expansion: Many platforms appear to be expanding across regions rather than concentrating in particular markets, suggesting a strategy of national coverage through local brand acquisition.
- Digital Integration: Platform company websites suggest increasing emphasis on technology integration, with centralized lead generation and customer service systems supporting local execution.
- Brand Preservation: Most platforms maintain the original branding of acquired companies, recognizing the value of established local reputation and customer relationships.
As consolidation continues, we can expect further competition among these platforms for high-quality acquisition targets, potentially driving up valuations for well-established regional roofing contractors with strong customer bases and operational excellence.
Strategic Buyers in the Roofing Industry
While private equity-backed platforms have been aggressively consolidating the residential contractor segment of the roofing market, strategic buyers are also playing a significant role in market consolidation, with a distinct focus on roofing materials manufacturing, distribution, and commercial roofing rather than residential installation.
These established companies from various segments of the value chain are making strategic acquisitions to enhance their market positions, expand geographically, and diversify their service and product offerings.
Beacon Roofing Supply
Market Position: A leading distributor of roofing materials and building products in North America.
Acquisition Strategy: Beacon has been one of the most active acquirers in the distribution segment, completing 8 acquisitions in 2023 alone. The company focuses on acquiring regional distributors to expand its national footprint.
Notable Acquisitions:
- Garvin Construction Products
- Crossroads Roofing Supply
- Roofers Supply
- H&H Roofing Supply
Strategic Rationale: Through these acquisitions, Beacon continues to strengthen its position as one of the largest roofing materials distributors in North America, enhancing its ability to serve contractors efficiently across multiple regions.
Carlisle Companies
Market Position: Provides roofing solutions through its Carlisle Construction Materials division.
Acquisition Strategy: Pursuing acquisitions that align with its “Vision 2025” strategy to simplify its portfolio and build scale with synergistic acquisitions.
Notable Acquisitions:
- Henry Company
- Pac-Clad (Petersen)
- Metal Era
Strategic Rationale: Carlisle is focusing on enhancing its building envelope solutions by acquiring complementary product lines that strengthen its commercial and residential offerings.
Gulfeagle Supply
Market Position: Premier roofing and building products distributor, supplier, and contractor of roofing products.
Acquisition Strategy: Expanding geographic reach through regional distributor acquisitions.
Notable Acquisitions:
- Elite Roofing Supply
- ARS Supply
Strategic Rationale: These acquisitions have helped Gulfeagle grow to over 100 locations across the US, creating a dense network of distribution points to efficiently serve contractors.
Strategic Buyer Trends
The activity of strategic buyers in the roofing industry reveals several important trends:
- Materials and Commercial Focus: Unlike PE-backed platforms that primarily target residential contractors, strategic buyers are predominantly interested in roofing materials manufacturing, distribution, and commercial roofing services. This reflects their strategy to control supply chains and focus on higher-value commercial segments.
- Vertical Integration: Companies are pursuing acquisitions that allow them to control more segments of the value chain, from manufacturing to distribution, with less emphasis on installation services, particularly in the residential sector.
- Geographic Expansion: Nearly all strategic buyers are using M&A to enter new regional markets without having to build operations from scratch.
- Portfolio Diversification: Buyers are adding complementary product and service offerings to become more comprehensive solutions providers, particularly in commercial and specialty roofing materials.
- Consolidation of Distribution: The distribution segment is seeing particularly active consolidation, with companies like Beacon and Gulfeagle rapidly expanding their networks to achieve economies of scale.
The most significant strategic transaction in recent history was The Home Depot’s acquisition of SRS Distribution for approximately $18 billion in March 2024. This landmark deal represents a major shift in the industry landscape, with one of the largest home improvement retailers making a substantial commitment to the roofing supply sector.
As the market continues to evolve, we expect strategic buyers to remain active, primarily targeting roofing materials manufacturers, distributors, and commercial roofing operations. This creates a noteworthy market dynamic where strategic buyers and private equity platforms often focus on different segments of the market – with strategic buyers concentrating on materials and commercial segments, while PE platforms continue their aggressive consolidation of residential roofing contractors.
Navigating Your Path Forward
The rapid consolidation of the roofing industry presents both opportunities and challenges for business owners.
In this competitive environment, working with specialized M&A advisors can make a substantial difference in your transaction outcome. From creating competitive bidding environments and finding the right buyers to navigating complex deal structures and managing the demanding due diligence process, professional guidance is crucial to protect your interests throughout the sale.
The Axia Advisors Advantage
Axia Advisors brings roofing-specific expertise to every transaction, with a proven track record of successful deals in the industry. Our team understands the unique dynamics of roofing company valuations and has established relationships with all major buyers in the space.
Whether you’re planning to sell soon or simply exploring options, a conversation with our team can help you understand your company’s position in today’s market and how to maximize its value.
Contact Axia Advisors today for a confidential consultation with roofing industry M&A experts.
Your business represents years of hard work. Make sure you have the right advisors by your side when it’s time to consider your next steps.
