Expert opinion
Alexei Garan considers whether Mergers and Acquisitions (M&A) might just be the key for construction leaders looking to navigate the headwinds in their sector.
Amid rising raw material costs, inflation, war in eastern Europe, Brexit and the hangover effect from the pandemic, the construction industry is in the middle of a perfect storm and many companies need solutions.
Smaller construction companies might consider a merger as a way not just to stabilise, but ultimately be a successful business in the short to medium term. This is largely down to the pulling power, or indeed lack, of a company’s earnings. As a rule of thumb, if a company’s earnings are around £2 million, they should certainly consider the potential benefits of a merger with another business (often a known competitor of the company in question) of a similar or slightly larger quantum, to push the figure up towards the £5 million mark. My colleague Rick Martignetti looks at the issue in Construction Update magazine…
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