Reece Group's US expansion was intended to capture long-term growth, but worsening market conditions and falling profits have raised doubts about its American operations.
The $6.8 billion Australia-listed building supplies company is facing difficulties in the US, where both revenue and earnings declined over the past year. Although the company has publicly denied plans to exit, Reece is seen as a possible acquisition target since several major US players are looking at underperforming assets amid strong merger and acquisition activity.
Reece entered the US market in 2018 by acquiring plumbing distributor Morsco for $1.9 billion. The move was driven by the scale of the American waterworks industry, which is eight times larger than Australia's and had been growing at double the rate. Morsco now operates across 16 Sun Belt states and ranks among the top three suppliers in most of its markets. However, momentum has slowed. The US was once positioned as a key growth driver, but that trajectory has been interrupted by weaker construction demand, high mortgage rates and more intense competition from local players.
In the last financial year, Reece's US revenue fell 5% to $3.3 billion and EBITDA dropped 10% to $263 million. Across its international operations, total revenue fell 1% to $9 billion while EBITDA declined 11% to $901 million. Internally, the group continues to face pressure. Fortiline, a business unit of Reece, is up against new competition from STAline, which was launched by one of Fortiline's original founders in 2023.
US investor interest is growing as mergers and acquisitions activity climbs. PwC reports that deal values in the Americas rose 26% in the first half of 2025, reaching $908 billion. This was largely due to US-based acquirers focusing on domestic assets. Competitors such as Home Depot and Ferguson are seen as likely suitors for Reece if the opportunity arises.
Although there is no indication that Reece plans to leave the US market, growing takeover interest and continued operational issues could force a shift in strategy if external pressures build further.
