M&A Update: Tile, Stone, and Surfaces (2H 2025)

Executive Summary – 2H2025 M&A Update

M&A activity in the tile, stone, and surfaces sector remained subdued in the second half of 2025, with Artivo’s acquisition of Walker Zanger and Anthology standing as the only announced transaction. However, strategic buyers continue to be active behind the scenes, with ongoing discussions involving leading distributors and fabricators. Market uncertainty driven by tariffs, elevated interest rates, softness in residential construction activity, and silicosis-related litigation continues to temper deal velocity. Despite these headwinds, TwinShore Advisors remains highly active with two live sell-side mandates expected to go to market in 2026 and a growing pipeline of companies preparing for the eventual recovery.

Strategic Buyers Remain Active Despite Limited Announced Deal Volume

M&A activity across the tile, stone, and surfaces sector remained muted in the second half of 2025, with only one announced transaction: Artivo’s acquisition of Walker Zanger and Anthology. While the limited publicized deal volume may suggest continued market stagnation, it masks a more dynamic underlying environment. Behind the scenes, several smaller, distressed businesses were forced to pursue sales to preserve enterprise value—underscoring that deal activity is continuing, albeit selectively and often under challenging conditions.

Strategic Buyers Continue to Drive the Market

Strategic buyers, including private equity-owned companies, remain the primary source of momentum in today’s M&A landscape. Over the past several months, TwinShore Advisors has spoken with multiple companies that have been approached by well-capitalized acquirers actively pursuing growth through acquisition. On the distribution side, we are aware of ongoing discussions involving Artivo, TileBar, Paramount Global Surfaces, and Spartan Surfaces. On the fabrication side, both Floform and K.G. Stevens continue to evaluate acquisition opportunities.

Importantly, most of these conversations remain ongoing, reflecting a market in which buyers are active but disciplined as they navigate valuation expectations, integration considerations, and broader macroeconomic uncertainty.

Market Headwinds: Macro Environment, Tariffs, Interest Rates, and Silicosis Litigation

Several external pressures continue to weigh on transaction volume and decision-making:

• Macro and trade uncertainty added unpredictability to cost structures and sourcing, driving many management teams to prioritize operational execution and cash flow preservation over M&A. While not independently verified, we heard from multiple industry participants that some private equity–owned platforms experienced employee departures and, in certain cases, implemented layoffs. In addition, several private equity investments made during the COVID era now appear to be under increasing pressure from the elevated leverage used to finance those transactions.

• Interest rates remain elevated, constraining access to leverage for private equity buyers and dampening transaction financing capacity. Higher borrowing costs also impacted new residential construction and consumer remodel spend.

• Silicosis-related litigation continues to cast a long shadow over the stone industry, dampening buyer risk appetite as acquirers struggle to quantify potential exposure not only within target businesses, but within their own operations as well—driving a more defensive approach to capital deployment. Together, these factors have contributed to extended timelines, cautious underwriting, and, in many cases, delayed sale processes.

Active Mandates and a Growing Pre-Market Pipeline

Despite these headwinds, TwinShore Advisors remains highly active. We are currently engaged on two live mandates—one in tile distribution and one in tile installation—that we expect to take to market in 2026. We are also working with several distributors and fabricators that are beginning to position their businesses for a sale as soon as the market shows earnest signs of recovery.

Many owners are using this period to professionalize operations, strengthen management teams, improve reporting, and optimize cost structures to enhance future value. Smaller players are also increasingly exploring combinations with peers to build scale, improve competitiveness, and better position themselves for an eventual exit.

In parallel, we are having a growing number of conversations with owners seeking growth capital to expand operations, upgrade equipment, or invest in new capabilities. Together, these trends point to renewed confidence among operators and early signs of a strengthening market backdrop.

2026 Outlook

While the second half of 2025 did not deliver a broad-based M&A rebound, the continued activity among strategic acquirers, growing pre-market preparation among owners, and early signs of stabilization across certain end-markets suggest that the foundation is being laid for a healthier transaction environment ahead. As macro uncertainty recedes and financing conditions normalize, we expect a meaningful release of pent-up supply and demand.

TwinShore Advisors remains deeply embedded across the tile, stone, and surfaces ecosystem, working alongside founders, family-owned businesses, and management teams as they evaluate strategic alternatives and prepare for the next chapter of growth.

The International Surface Event 2026 – Las Vegas: We would love to see you at The International Surface Event in Las Vegas on January 27-29, 2026. If you are interested in an on or off-site meeting, please reach out to Chobun Hieblinger at chieblinger@twinshoreadvisors.com or Wade Bennett at wbennett@twinshoreadvisors.com.