Why Contracting & Construction, A/E & Facility Services Companies Are Experiencing Unprecedented Buyer Demand
The M&A market is sending a clear message: Quality companies have rarely been more valuable than they are today.
Private equity firms, strategic acquirers, and family offices are aggressively pursuing these A/E, MEP, HVAC, roofing, fire & security, electrical, restoration, plumbing, landscaping, vegetation management, industrial/facility services or other specialty trade types of businesses throughout the United States. What was once considered a fragmented local industry has become one of the most sought-after investment sectors in the middle market.
In fact, Private Equity Info ranked Construction Services & Engineering as the #1 targeted industry for private equity platform investments in 2025, representing approximately 15.7% of all platform investments tracked by the firm and that momentum has carried into the 1H 2026.
The reason is simple: investors see years of growth ahead.
A Record Pace of M&A Activity
According to PitchBook's Construction & Engineering Report, the sector recorded approximately 501 transactions in Q1 2026 alone, representing the highest quarterly deal volume on record and a 32% increase over the prior year. Exit value more than doubled to approximately $9.5 billion, demonstrating continued buyer confidence and strong liquidity for business owners.
The MEP services sector remains particularly active, with approximately 390 transactions completed during the quarter, while private equity represented nearly 50% of all deal volume, the highest participation level seen in four years. Median EV/EBITDA multiples for reported private equity transactions reached 8.1x EBITDA, among the strongest valuation levels observed in the market.
More importantly, buyers are not simply chasing size—they are chasing quality.
Buyers Love Recurring Revenue
One of the biggest themes driving today's acquisition market is the shift toward recurring revenue and service-based business models.
Approximately $100 billion commercial HVAC industry is anchored by recurring maintenance, repair, retrofit, and replacement spending rather than solely new construction activity. Maintenance and repair alone account for roughly $39 billion annually, making it the largest and most attractive segment due to its recurring nature and superior margins.
This trend extends well beyond HVAC.
Electrical contractors, plumbing companies, roofing companies, fire and life safety providers, landscaping firms, vegetation management contractors, and industrial maintenance businesses all benefit from recurring customer relationships and essential service requirements.
From an investor's perspective, recurring maintenance contracts create predictable cash flow, higher customer retention, and reduced cyclicality—three characteristics that command premium valuations.
Fragmentation Creates Massive Acquisition Opportunity
Another major driver of buyer demand is fragmentation.
FMI Consulting estimates there are more than 70,000 electrical contracting firms operating throughout the United States, with approximately 70% of industry spending controlled by firms generating less than $50 million in annual revenue.
The HVAC industry tells a similar story.
Raymond James estimates there are 10,000 to 20,000 local HVAC operators across the country alongside thousands of regional independents. Despite years of consolidation, national platforms still control only a modest share of the overall market.
For private equity investors, this represents a once-in-a-generation opportunity.
Buyers can acquire regional market leaders, combine operations, expand service offerings, increase purchasing power, and build larger platforms that ultimately command higher valuations.
This roll-up strategy continues to drive significant acquisition activity across A/E, MEP, HVAC, roofing, fire & security, electrical, restoration, plumbing, landscaping, vegetation management, industrial/facility services or other specialty trade businesses.
Data Centers, AI & Electrification Are Creating New Demand
Today's M&A activity is not being driven solely by consolidation. Powerful secular trends are creating long-term growth opportunities for specialty contractors.
FMI projects the U.S. electrical services market will grow from approximately $254 billion in 2026 to more than $320 billion by 2030, supported by electrification, AI infrastructure, advanced manufacturing, data centers, and modernization of aging facilities.
Meanwhile, data centers are identified as one of the fastest-growing end markets for commercial HVAC providers, forecasting approximately 13.3% annual growth through 2028. Healthcare, life sciences, advanced manufacturing, and warehouse facilities are also expanding at above-market rates.
As AI adoption accelerates, data center construction has exploded. Total U.S. data center construction starts increased from approximately $6.8 billion in 2021 to $24 billion in 2025, creating substantial opportunities for engineering, mechanical, electrical, controls, and specialty service providers.
Labor Shortages Are Increasing Strategic Value
Ironically, one of the industry's biggest challenges has become one of its greatest valuation drivers.
Skilled labor shortages continue to affect HVAC technicians, electricians, plumbers, engineers, and other specialized trades nationwide. Buyers increasingly recognize that an experienced workforce may be more valuable than equipment or contracts alone.
Strategic acquirers are often pursuing acquisitions not only for customers and revenue, but also for access to trained technicians and specialized labor.
Companies with strong management teams, established recruiting programs, and experienced field personnel are commanding premium interest from buyers.
Why Owners Should Consider Their Options Today
The current market benefits from a rare alignment of favorable factors:
Record levels of private equity capital seeking deployment
Strategic acquirers actively consolidating fragmented markets
Growing family office participation in direct acquisitions
Strong infrastructure and industrial spending
Data center and AI-driven growth
Electrification and energy transition investments
Aging infrastructure requiring ongoing maintenance and upgrades
Labor scarcity increasing strategic value
For owners of A/E, MEP, HVAC, roofing, fire & security, electrical, restoration, plumbing, landscaping, vegetation management, industrial/facility services or other specialty trade businesses, the combination of strong buyer demand and favorable industry fundamentals has created one of the most attractive seller environments seen in years.
We've handled transactions in all the service sectors noted above. If you are an owner thinking about your next chapter via an exit, recapitalization or divestiture strategy, the current market is sending an unmistakable signal: the window remains open.
I invite you to a confidential, no-obligation conversation to discuss your company’s position in the market, your wants and concerns about the “right exit” strategy and a complimentary Market Valuation Assessment for your specific business.
For over 28 years, I’ve been delivering M&A expertise. Vercor and I serve as a trusted partner to help build long term, iterative strategies that ensure you are positioned to meet your unique personal and financial goals whether it is selling, recapitalizing, acquiring or divesting of a division now or down the road. Call or email me to find out how this data relates to your company.
Todd Cummiskey
Vercor
281-436-7328
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