Aggregates Industry Market Report

In This Quarterly Report, Provided Exclusively to Rock Products, Capstone Partners Offers Insight Into Merger and Acquisition Activity, Capital Markets Trends, Aggregate Production and Pricing.

By Darin Good, Brian Krehbiel and Crista Gilmore

The Aggregates sector has continued to benefit from robust construction demand, despite persistent supply chain disruptions and rising inflation. The merger and acquisition (M&A) market has remained healthy with public companies actively refocusing their product portfolios. Several key report takeaways are outlined below.

  1. Leading sector players have captured strong revenue growth, however, elevated costs have negatively impacted margins.
  2. Surging demand for aggregates intensive projects, including warehouses and data centers, have provided sector participants with valuable revenue opportunities.
  3. M&A activity has outpaced the prior year as public companies have focused on divesting non- core assets and bolstering the high margin areas of their businesses.
  4. Middle market M&A purchase multiples in the Aggregates sector have demonstrated strength, outpacing the broader Building Products & Construction Services industry.
  5. Prices across all Capstone-tracked aggregate materials have increased, reflecting the current inflationary environment.


In this quarterly report, Capstone Partners provides insight into mergers & acquisitions, capital markets trends, aggregates production, and pricing data through year-to-date 2022.

Capstone’s Building Products & Construction Services Team advises industry business owners, entrepreneurs, executives, and investors in the areas of M&A, capital raising, and various special situations. Due to our extensive background and laser focus within the industry, Capstone is uniquely qualified and has an unparalleled track record of successfully representing Building Products & Construction Services companies.

Public Company Commentary

Public company EBITDA trading multiples in the Aggregates sector have averaged 8.8x over the last-twelve-month (LTM) period, a notable decline from the prior year’s average of 10.9x. Vulcan (NYSE:VMC) and Martin Marietta (NYSE:MLM) continue to lead the sector from an EBITDA multiple perspective, trading at 16.8x and 16.4x, respectively.

Public Equity Markets Struggle Amid Elevated Volatility

Aggregate Materials Index: -21.8%

S&P 500: -1.8%

Dow Jones Industrial Average: -4.9%

Elevated inflation, supply chain disruptions, and rising interest rates have contributed to a broad selloff across equity markets in recent weeks. Market uncertainty has been heightened as the Federal Reserve aims to curb inflation through multiple interest rate hikes—a delicate balance between quelling higher prices and inducing an economic downturn. Public companies in the Aggregates sector have trailed the broader markets, with Capstone’s Aggregate Materials Index falling -21.8% in the past year.

Healthy Aggregates Sector Demand Persists

Surging demand in the Aggregates sector has continued through year-to-date (YTD) 2022, uninterrupted by rising interest rates and persistent labor shortages as total construction spending increased 11.7% year-over-year (YOY) in March, according to the U.S. Census Bureau.1

While the sector has certainly encountered challenges with elevated materials and transportation costs, healthy construction backlogs and favorable aggregates pricing have driven top line growth for leading industry players. Market participants have gained solid demand visibility, evidenced by the Associated Builders and Contractors (ABC) backlog index rising to 9.3 months, marking a healthy YOY increase of 1.3 months.2

Despite elevated construction input costs, which rose nearly 24% YOY in March (U.S. Census Bureau), contractors remain confident that sales, profit margins and staffing are poised to grow over the next six months, according to ABC.

The favorable aggregates pricing environment has helped to offset continuous cost inflation and rising diesel and other energy expenses. Martin Marietta, while encountering reduced first quarter profitability, achieved a 25% YOY increase in revenues—marking a new first quarter record, according to its earnings release.3

In addition, strong demand in aggregates intensive projects including warehouses, data centers, and manufacturing facilities has contributed to sector optimism. Notably, manufacturing construction spending has experienced a significant boost, rising 31.9% YOY in March, which may be reflective of a reshoring of supply chains.

Well funded state departments of transportation (DOT) budgets have also supported the favorable outlook in the Aggregates space, bolstered by the Infrastructure Investment and Jobs Act which has buoyed growth prospects for highways and other infrastructure projects. Moving through Q2, supply chain disruptions and elevated materials costs will continue to present challenges for sector participants, forcing many to focus on margins and core business operations. This presents significant consolidation opportunities as aggregates businesses shed assets that may provide meaningful synergies or diversification for other strategic players.

M&A Volume Continues At Rapid Pace In 2022

M&A activity in the Aggregates sector has continued to outpace the prior year with 52 transactions announced or completed through YTD. Private strategic buyers have dominated M&A volume, accounting for 61.5% of total 2022 transactions as sector players have leveraged inorganic growth to scale operations and penetrate new geographies.

While private equity firms have accounted for a modest 21.2% of transaction activity, sponsors have nearly surpassed last year’s total M&A count with 11 transactions to-date compared to 13 in all of 2021. In addition, the Building Products industry has recently become one of the top sectors sought by private equity firms within Capstone’s network.

Amid an elevated cost environment, public companies have increasingly utilized divestitures to optimize their portfolios and drive margin strength. Notably, Summit Materials (NYSE:SUM) has continued to divest non-core businesses that do not meet return or margin targets. In Q1 it completed its ninth divestiture, selling a business in its East segment which generated $48 million of sale proceeds and equated to an 8x EBITDA multiple, according to its earnings call.4 Martin Marietta has adopted a similar strategy as it looks to optimize its aggregates portfolio, divesting its Colorado and Central Texas ready-mix concrete businesses to Smyrna Ready Mix in April for an undisclosed sum (see more details on next page).

Following elevated M&A valuations across the middle market in 2021, many sectors have noted declines in pricing through YTD 2022, potentially signaling the beginning of a shift to a buyer’s market. However, multiples in the Aggregates sector have remained healthy, with the average EBITDA multiple spanning 2019 to YTD 2022 amounting to 9.5x. At the middle market level, characterized by transactions below $500 million in enterprise value, the average sector multiple has stood at a robust 8.7x, outperforming the broader Building Products & Construction Services industry valuation of 7.9x EBITDA, according to Capstone Partners Middle Market M&A Valuations Index.

Private Equity Activity

GF Data Resources, a provider of detailed information on business transactions ranging in size from $10 to $250 million, provides quarterly data from over 200 private equity firm contributors on the number of completed transactions. The following chart provides the number of completed transactions from GF Data contributors, the average total enterprise value (TEV)/EBITDA multiples, and the average amount of debt utilized in the transaction computed as a multiple of EBITDA. The data, although not industry specific, demonstrated that EBITDA multiples held steady in Q4 2021 at 7.5x.

Public Strategic Players Look To Optimize Portfolios

Public strategics in the Aggregates space have been active M&A participants through YTD 2022, both as buyers and sellers of assets. Leading sector players are expected to continue to engage in M&A through the remainder of the year, with many leveraging healthy balance sheets and liquidity positions.

Transaction Overview

Lehigh Hanson, a subsidiary of HeidelbergCement has acquired Meriwether Ready Mix for an undisclosed sum (April 2022). Founded in 2005, Meriwether is a leading ready-mix concrete producer serving residential and commercial clients in the Metro Atlanta area. The transaction includes four ready-mixed concrete plants and a fleet of mixer trucks.  

M&A and Sector Takeaways

Lehigh Hanson has continued to optimize its aggregates portfolio with the addition of Meriwether which follows its January purchase of Corliss Resources for a 9x EBITDA multiple (enterprise value not disclosed). Corliss is a leading aggregates and ready-mixed concrete provider in the U.S. pacific northwest. Lehigh’s recent acquisition streak also showcases HeidelbergCement’s focus on establishing a greater U.S. presence through Lehigh Hanson. The addition of Meriwether also aligns with longer term ESG (environmental, social, and governance) initiatives in the Aggregates sector, as Meriwether is expected to bolster Lehigh Hanson’s sustainable, low carbon concrete product offerings.

Transaction Overview

Smyrna Ready Mix Concrete (SRM Concrete) has aggressively expanded its ready-mix operations in recent months with two acquisitions in March acting as the counterparty to divestitures from Argos USA and Martin Marietta. In March, SRM Concrete acquired Martin Marietta’s Colorado and Central Texas ready-mix operations for an undisclosed sum. The transaction was preceded by SRM’s purchase of 23 ready-mix concrete batching plants from Argos USA for an enterprise value of $93 million (March 2022).

M&A and Sector Takeaways

The transaction highlights SRM’s focus on bolstering its scale and geographic concentration. It also demonstrates the active market for public company divestitures. With a potential economic downturn on the horizon, many sector players are fortifying their operations, focusing on high margin categories that are core to operations. Argos USA’s parent company, Cementos Argos (BVC:CEMARGOS) sold its concrete plants to shed assets in suburban markets that were not already integrated into its production and logistics chain, according to a press release.5 Martin Marietta’s rationale for sale revolved around its capital allocation priorities, specifically returning cash to shareholders, according to a company release.6

Select Transactions

Company Spotlights

Ticker: NYSE:SUM

Headquarters: United States

Markets: Construction Materials

LTM Revenue: $2.4 Billion

Market Capitalization: $3.1 Billion

Company Description

Summit experienced a modest 1.5% decline in net revenue in Q1, primarily due to completed 2021 divestitures which was partially offset by increases in average sales prices of its products, according to its earnings release.7 Summit’s Cement business achieved 13.7% increase in net revenue YOY, driven by a 10.1% growth in average selling prices—representing the strongest percentage pricing growth in the company’s history. Double digit price increases were also recorded for asphalt, which saw a 10.2% rise fueled by strong pricing gains in Virginia and the Intermountain West market. However, asphalt volume registered the steepest decline out of all of Summit’s products, falling 45.1%.

“Our first quarter 2022 results demonstrate that we have sustained the momentum we built in 2021 and are on solid footing as we head into the prime construction season. Our unwavering focus is squarely on our strategic execution and controlling what we can control to make further progress towards our Horizon One financial objectives of driving margin expansion, controlling leverage, and increasing ROIC. Price increases were communicated across all markets and lines of business with effective dates varying from January 1 to April 1, 2022, depending upon seasonality,” said Summit Materials CEO Anne Noonan in a company earnings call.

Summit has focused on portfolio optimization, mainly through divestitures. It has laid out long term financial goals through its multi-horizon strategy, with Horizon One emphasizing business efficiency through divesting dilutive businesses to boost margins. To-date, Horizon One divestitures have captured more than $175 million in proceeds.


Ticker: NYSE:ACA

Headquarters: United States

Markets: Construction and Engineering

LTM Revenue: $2.1 Billion

Market Capitalization: $2.5 Billion

Company Description

Arcosa (NYSE:ACA) experienced healthy Q1 performance, with a YOY revenue increase of 22%, and adjusted EBITDA growth of 30%, according to its earnings release.8 Robust operating performance was largely fueled by substantial growth in its Construction Products and Engineered Structures segments, which experienced revenue increases of 38% and 21% YOY, respectively. However, its Transportation Products segment saw revenues fall 8% due to lower barge volume and pricing.

“Our first quarter results provided a strong start to 2022, providing increased confidence in our outlook for the full year. While it is early in the year, we continue to see strong demands for our approach in many of our key markets. We’re closely monitoring inflationary pressures and proactively raising prices to compensate for higher material and other input costs. At the same time, we’re staying in touch with our markets to watch for any signs of economic cooling as interest rates continue to increase,” said Antonio Carrillo Rule, President, Chief Executive Officer, and  Director in a company earnings call.9

Along with other leading players in the space, Arcosa has leveraged divestitures to reduce the complexity and cyclicality of its business portfolio. In April 2022, it sold its storage tank business for $275 million in cash. The transaction is consistent with its focus on high margin growth opportunities to create longstanding shareholder value. Arcosa is expected to continue to explore accretive acquisition targets, citing a robust pipeline of investment opportunities to enhance its product offerings and geographic footprint.

Construction Materials Update

Construction input prices increased 0.8% in April 2022 from the previous month and 23.7% YOY according to an Associated Builders and Contractors analysis of the U.S. Census Bureau of Labor Statistics data.10 Softwood lumber was the only category to record a price decrease in April, falling 17.7% compared to the prior month.

Aggregate Materials Update

Pricing across aggregate materials increased in 2021 compared to the prior year, led by gains in cement which increased 8.5%, followed by crushed stone which recorded a 6.6% increase.


  • Portland cement consumption amounted to 27.3 million metric tons in Q4, marking a YOY increase of 5.4%. In full year 2021, cement production increased 4.4% to 107.2 million metric tons.
  • The average net selling price per ton for Martin Marietta and Eagle Materials cement in 2021 increased 8.5% to $121.94. 

Source: U.S. Geological Survey and Capstone Research

Ready-Mix Concrete

  • Ready-mix concrete prices increased 2.2% YOY in 2021 to $127.37 per cubic yard.  Price data is computed from the average ready-mix net selling prices of Vulcan Materials, Martin Marietta, and Eagle Materials.
  • Ready-mix volume increased 4.7% YOY in Q4 to 99.9 million cubic yards. Production volume decreased 7.8% compared to Q3. In full year 2021, production increased 4.3% YOY.

Source: NRMCA Industry Data Survey, Average ready-mix selling price of U.S. Concrete (not included after Q1 2021 due to acquisition by Vulcan), Vulcan Materials, Martin Marietta Materials, Eagle Materials, and Capstone Research


  • Asphalt prices increased 2.9% YOY in 2021 to $54.23, as measured by the average net asphalt selling prices of Vulcan Materials and Martin Marietta. In Q4 alone, pricing increased by 4.4% compared to Q3.
  • Asphalt volume is reported on an annual basis.  The most recent asphalt production amounted to nearly 408 million tons in 2020.

Source: NAPA Asphalt Pavement Industry Survey, Vulcan Materials, Martin Marietta Materials average of net asphalt selling prices, and Capstone Research

Crushed Stone

  • Crushed stone production in Q4 increased 9.1% YOY to 397 million metric tons and rose 4.0% YOY in 2021 on a full year basis. Production volume has decreased 8.9% in Q4 compared to Q3.
  • Crushed stone prices increased 6.6% YOY to $13.0 per metric ton.

Source: U.S. Geological Survey and Capstone Research

Sand & Gravel

  • An estimated 250 million metric tons of sand & gravel were produced and shipped for consumption in Q4, an increase of 3.3% YOY. In full year 2021, production increased 4.3%.
  • Sand & gravel prices increased 3.2% to $9.9 per metric ton.

Source: U.S. Geological Survey and Capstone Research


Capstone’s Building Products & Construction Services Team advises industry business owners, entrepreneurs, executives, and investors in the areas of M&A, capital raising, and various special situations. Due to our extensive background and laser focus within the industry, Capstone is uniquely qualified and has an unparalleled track record of successfully representing Building Products & Construction Services companies.

Capstone Partners has developed a full suite of corporate finance solutions, including M&A advisory, debt advisory, financial advisory, and equity capital financing to help privately owned businesses and private equity firms through each stage of the company’s lifecycle, ranging from growth to an ultimate exit transaction. 

To learn more about Capstone’s wide breadth of advisory services and Rock Products industry expertise, please contact Managing Director Darin Good.


  1. U.S. Census Bureau, “Construction Spending,”, accessed May 16, 2022.
  2. Associated Builders and Contractors, “ABC’s Construction Backlog Up in April; Contractor Confidence Down,”, accessed May 16, 2022.
  3. Martin Marietta, “Martin Marietta Reports First-Quarter 2022 Results,”, accessed May 16, 2022.
  4. Summit Materials, “Summit Materials Q1 2022 Earnings Call,”, accessed May 16, 2022.
  5. Global Cement, “Smyrna Ready Mix Concrete to acquire 23 ready-mix concrete plants from Argos USA,”, accessed May 16, 2022.
  6. Globe Newswire, “Martin Marietta to Sell Colorado and Central Texas Ready Mixed Concrete Operations to Smyrna,”, accessed May 16, 2022.
  7. Summit Materials, “Summit Materials, Inc. Reports First Quarter 2022 Results,”, accessed May 16, 2022.
  8. Arcosa, “Arcosa, Inc. Announces First Quarter 2022 Results,”, accessed May 16, 2022.
  9. Arcosa, “Arcosa Inc – First Quarter 2022 Earnings Call,”, accessed May 16, 2022.
  10. Associated Builders and Contractors, “Monthly Construction Input Prices Increase in April, Says ABC,”, accessed May 16, 2022.


This report is a periodic compilation of certain economic and corporate information, as well as completed and announced merger and acquisition activity. Information contained in this report should not be construed as a recommendation to sell or buy any security. Any reference to or omission of any reference to any company in this report should not be construed as a recommendation to buy, sell or take any other action with respect to any security of any such company. We are not soliciting any action with respect to any security or company based on this report. The report is published solely for  the general information of clients and friends of Capstone Partners. It does not take into account the particular investment objectives, financial situation or needs of individual recipients. Certain transactions, including those involving early-stage companies, give rise to substantial risk and are not suitable for all  investors. This report is based upon information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied  upon as such. Prediction of future events is inherently subject to both known and unknown risks and other factors that may cause actual results to vary materially. We are under no obligation to update the information contained in this report. Opinions expressed are our present opinions only and are subject to change without notice. Additional information is available upon request. The companies mentioned in this report may be clients of Capstone Partners.  The decisions to include any company in this report is unrelated in all respects to any service that Capstone Partners may provide to such company. This  report may not be copied or reproduced in any form or redistributed without the prior written consent of Capstone Partners. The information contained herein should not be construed as legal advice.

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