2025 AEC M&A Outlook Report
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Cultural and leadership alignment are also gaining importance, with 29% of buyers saying organizational culture significantly influenced their decision to move forward with a deal. This emphasis on fit, integration, and employee retention marks a continued evolution away from volume-driven consolidation toward strategic, people-centered partnerships. SIZE & GEOGRAPHIICAL CONSIDERATIONS Motivations vary by firm size and structure: Large firms (500+ employees) overwhelmingly cited market expansion as their top driver, focusing on regional growth corridors such as the Southeast and Mountain West. These firms accounted for more than one-third of planned acquisitions in the 2025 AEC M&A Outlook dataset. Mid-sized firms (51-250 employees) prioritized service diversification (41%) and access to new talent pools (37%), often acquiring to close capability gaps in specialty markets. Smaller firms (under 50 employees) leaned toward succession planning and cultural alignment, with many seeking mergers of equals or joining employee-owned platforms to ensure continuity. Across all firm sizes, “adding staff” ranked lowest as a motivating factor, which confirms that most buyers target specialized expertise and client relationships, not headcount expansion. FINANCIAL CONSIDERATIONS Financial conditions continue to shape expectations, but they’re not the sole driver. Most sellers expect valuations between 60%-100% of annual net service revenue or roughly 4-6x EBITDA. The 2025 AEC M&A Outlook Survey reveals that firms with profit margins above 20% are nearly three times more likely to expect valuation above 5x EBITDA, while firms below 10% profitability tend to cluster closer to the 3.5-4x range.
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