Industry Update: Takeaways from Coverings 2026

Following our recent updates from IBS/KBIS and The International Surface Event (TISE), TwinShore Advisors attended Coverings 2026 in Las Vegas to gather additional insights across the tile, stone, and broader surfaces ecosystem. The conference provided a valuable opportunity to engage directly with industry participants and further assess current market conditions, strategic priorities, and M&A sentiment.

Conference Overview

TwinShore Advisors attended the first three days of Coverings at the Las Vegas Convention Center, holding approximately 20 meetings, primarily with tile and stone distributors. We heard from both large strategic acquirers — such as UCX and Paramount Global Surfaces — as well as business owners evaluating a potential sale.

Engagement levels were strong throughout the event. Several owners indicated they are preparing to formally test the market within the next 30 to 60 days, while strategic buyers continue to actively evaluate acquisition opportunities. Notably, one CEO outlined multiple acquisition targets of interest should they become available, underscoring the continued appetite for consolidation.

Overall, Coverings was a highly productive event, with consistent and constructive dialogue across participants.

Market Conditions and Operating Environment

Feedback from Coverings suggests modest improvement in operating performance relative to earlier in the year, reinforcing trends observed at prior conferences:

• Companies with exposure to high-end residential and commercial segments continue to outperform, with several reporting strong 2025 results and improved profitability.

• Broader demand trends remain mixed, with some participants noting a slower start to the year — largely attributed to weather disruptions — followed by stronger activity in March.

• Tile as a category continues to demonstrate relative resilience compared to other flooring surfaces.

• Outdoor living segments, including pool tile, pavers, and natural stone, have also shown stability, with some distributors reporting growth despite mixed signals in adjacent categories.

At the same time, operators continue to navigate a complex macro backdrop. Rising freight costs — driven in part by higher oil prices — along with tariffs, regulatory developments impacting quartz imports, and ongoing silicosis-related litigation remain key areas of focus.

A consistent theme across conversations was that while pent-up demand persists, the industry has largely adjusted to a more volatile operating environment. Rather than waiting for a full demand recovery, companies are increasingly focused on controllable initiatives, including new product introductions, channel expansion, and targeted share gains.

M&A Environment

M&A activity remains a central theme across the sector, with continued alignment between strategic intent and long-term industry dynamics:

• Buyers of all sizes remain active, ranging from large strategic platforms to smaller regional operators pursuing add-on acquisitions.

• We observed continued interest in acquisitions across dealers, distributors, and fabricators, including both inbound inquiries and active pursuit of targets.

• Several companies indicated growing openness to exploring a sale, particularly among those demonstrating consistent growth and strong positioning in higher-end or commercial markets.

As noted in prior updates, the primary constraint remains performance variability across potential sellers.

However, higher-performing businesses are increasingly approaching decision points, suggesting the potential for more meaningful transaction activity in the near term.

Importantly, buyer appetite remains intact. Based on our active engagements, macro uncertainty is no longer a primary deterrent to pursuing acquisitions, representing a notable shift from sentiment over the past 12–24 months.

We also spent time advising business owners on timing and value maximization. A recurring theme was that buyers will pay for demonstrated growth and future upside — and, importantly, are increasingly selective in today’s environment. In many cases, the alternative to a growth story is not simply a lower valuation, but no transaction at all, as buyers remain reluctant to pursue businesses that are flat or in decline.

We emphasized that sellers who see significant upside in their businesses should not assume that value will only be realized by waiting. Buyers underwrite and pay for that future growth today, particularly when it is supported by clear visibility and execution. As a result, businesses with stronger growth profiles and identifiable upside opportunities are often rewarded with higher multiples.

We also discussed how transaction structures — such as rollover equity and earnouts — can help bridge valuation expectations, allowing sellers to participate in continued value creation while de-risking outcomes for buyers.

Finally, we highlighted the importance of creating competitive tension in any sale process. Well-run, competitive processes not only validate positioning but are critical to maximizing value, as multiple interested buyers drive both pricing and terms. This remains a core component of our approach and a key differentiator in achieving optimal outcomes for our clients.

Industry Structure and Succession Dynamics

One topic that surfaced repeatedly — often unprompted — was the aging ownership base across the industry.

Participants highlighted ongoing challenges in attracting new talent, particularly on the installation side, but increasingly across the broader value chain. Many owners noted limited interest from the next generation in continuing family-owned businesses, with younger workers often gravitating toward service-oriented industries.

These dynamics continue to reinforce a long-standing industry theme: the tile and stone sector remains highly fragmented and positioned for continued consolidation, particularly as owners evaluate succession options.

Outlook

Coverings reinforced several key themes emerging from IBS/KBIS and TISE:

• Continued resilience in higher-end residential and commercial segments

• Gradual improvement in sentiment and operating performance

• Sustained strategic interest and building momentum in M&A activity

While near-term challenges persist, particularly in certain residential segments, the industry appears to be progressing through the cycle, with operators increasingly focused on proactive growth strategies and long-term positioning.

About TwinShore Advisors

TwinShore Advisors remains actively engaged across the tile, stone, and broader surfaces ecosystem, working with founders, family-owned businesses, and management teams on growth strategies, acquisitions, and long-term exit planning.

We welcome confidential conversations with business owners evaluating strategic alternatives or considering their next chapter.

Chobun Hieblinger (chieblinger@twinshoreadvisors.com)

Wade Bennett (wbennett@twinshoreadvisors.com)