Experts at business advisory firm BDO believe an improving house building industry followed by a recovery in construction will see a boom in the number of deals in the building products market.

A BDO report, Rebuilding for the future, analysed 375 transactions in the sector since 2008.

It found that the level of deals in 2012 was 65% higher compared to 2010’s low point and that the trend was set to continue.

Building products firms who have survived the carnage of recent years are seen by potential buyers as strong companies operating in a market with reduced competition due to the number of corporate collapses.

M&A amongst businesses operating in lightside products and services has been strong in the past year which is a reflection of a shift away from construction and towards repairs, maintenance and improvements as budgets have been tightened.

But deals among businesses operating in more heavyside products and services are predicted to improve.

Other sub-sectors identified for increased M&A activity are insulation and other energy efficiency products.

John Stephen, M&A partner at BDO said: “Despite major challenges faced by the sector over the last few years, M&A activity has bounced back faster than output and the recovery in multiples along with positive house building prospects should ensure further deal activity.”