— Coastal Construction Products
From Family Business to a $750M Platform
Client Overview
Coastal Construction Products was a specialty waterproofing and building products distributor, built by Martin Harrell’s father on a simple ethos: treat the team as one, and reward the branch rather than the individual. Martin became CEO in 2012, inheriting eight branches, roughly $70 million in revenue, and a culture everyone could feel but no one could name. Over the next decade he grew the company through eight acquisitions and three ownership eras: family-owned, private equity-backed under Supply Chain Equity Partners, and finally a division of Beacon Building Products, the $10 billion roofing distributor, where the business reached roughly $750 million.
Why It Matters
In April 2014, Martin and a longtime friend who ran a similar distribution business shook hands on a hike up Camelback Mountain and agreed to merge their companies. The day after meeting the attorney to structure the deal, Martin walked into his Vistage group and heard David Friedman speak about culture.
Coastal already had something special, built on his father’s team-first ethos. Martin just could not define it, and he knew that would not survive the growth ahead. Most acquirers win deals with money and lose value with culture. Coastal set out to run that equation in reverse: make culture the strategy, not the cleanup.
The Challenge
A merger is a human event before it is a legal one. In January 2015, Martin brought both management teams together for the first time. When he walked into the hotel, the geography told the story: his company on one side of the lobby, the other company on the other. Two organizations, no common ground.
The culture Coastal was known for lived in people’s heads, not in anything you could teach, repeat, or hold people to. And an aggressive M&A agenda was already underway, with every deal threatening to dilute what made the company great when it was small enough for the founder to touch everyone.
“We now have a common language. And we haven’t even done introductions yet.”
Coastal Construction Products
Martin Harrell
CEO
The Solution
Martin refused to open the kickoff with introductions. His leadership team had defined their Fundamentals, the shared and observable behaviors behind their culture, in advance. He scheduled the meeting for noon and brought David Friedman into the room instead of an org chart. Four hours later, before anyone had formally introduced themselves, the two organizations were one: comparing customer challenges, proposing joint approaches, realizing they were more alike than different.
What followed was not a launch. It was a practice. Every week for the next seven and a half years, one Fundamental was the focus, and a different employee wrote about it, what it meant to them and where they had fallen short. Roughly 400 different employees authored a message over that run. The Fundamentals stopped being something leadership pushed down and became the way the company talked to itself, and the way it had its hardest conversations.
When Coastal acquired a company, the Fundamentals came with it. Because they described behaviors almost no one would object to, adoption was the easy path, and cultural clarity made every integration faster.
The Results
Culture did not ride along on Coastal’s growth. It drove it. By 2018, Coastal had partnered with Supply Chain Equity Partners, growing from roughly $170 million to $250 million in revenue and nearly doubling EBITDA, from 7% to 11.3%, in about three years.
In November 2022, Beacon Building Products acquired Coastal to build a national waterproofing division and tapped Martin’s team to run it. They combined Beacon’s existing waterproofing business with what Coastal had built, and within two years the division approached $750 million. Rather than resist Beacon’s own core values, Martin mapped them to the Fundamentals his team already lived, one email a week for five weeks, and kept the weekly practice going.
Key Outcomes
- 8 acquisitions, sole buyer, no competitive process
- $70M to $750M across three ownership eras
- EBITDA 7% to 11.3% under private equity
- 8.5-year average tenure
- 7.5 years of weekly Fundamentals, ~400 authors
“It created a common language that let us have difficult conversations more easily. We got to talk not about you doing something wrong, but about a standard we had all agreed on, and whether you lived up to it.”
— Martin Harrell, CEOThe Culture You Need
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