2025 AEC M&A Outlook Report
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Private equity’s role continues to expand as investors recognize that the AEC industry—once dominated by founder-led ownership—now offers institutional-grade opportunity. With post-bonus return on equity trending near 20%, the AEC industry stands out as a source of steady, high-yield investment in a volatile economy. This influx of outside capital is reshaping ownership models and fueling continued consolidation. Entering 2026, M&A activity is expected to stay robust, driven by firms and investors seeking reliable growth, sustainable returns, and long- term strategic value. SECTOR TRENDS The next 12 months will extend the sector dynamics that defined 2025— steady deal flow, concentrated demand, and rising investor interest in the AEC industry’s reliable returns. Environmental, water, and infrastructure-focused firms remain top targets. Sustained public investment, climate resilience, and energy transition intiatives continue to attract both strategic acquirers and outside capital seeking consistent yield. These sectors now represent some of the most stable, high-performing investments in the built environment. Architecture and design firms tied to commercial real estate face a slower pace, as financing constraints and softening development pipelines temper buyer enthusiasm. Yet design firms with niche expertise or deep client relationships will still command attention from selective acquirers. SELL-SIDE DRIVERS Ownership transition remains a key driver. For many leaders, M&A is less about exit than continuity—finding partners who can sustain culture, retain talent, and scale the next generation of ownership. THE NEAR-TERM Through 2026, deal activity is expected to remain steady but selective, concentrated in high-growth markets tied to sustainability, infrastructure renewal, and energy transformation.
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