2025 AEC M&A Outlook Report
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Medium-Term Outlook Looking two to five years ahead, the AEC M&A market is expected to remain active—steady in volume but evolving in character. While today’s activity is powered by backlog strength and federal investment, the medium-term horizon will be defined by how firms respond to demographic shifts, technological integration, and capital market realignment. MOMENTUM BUILDS, SELECTIVITY INCREASES The 2025 AEC M&A Outlook Survey indicates that momentum will remain strong, though more discerning. Roughly two-thirds of surveyed buyers expect to pursue acquisitions within the next three to five years, but most plan to do so with a sharper focus on strategic fit. Buyers say they increasingly target firms with strong profitability, ESG expertise, and digital capabilities—particularly in data-driven infrastructure and environmental services. On the sell-side, leadership succession will continue to be the leading driver of activity. More than 55% of firms expect the retirement of senior principals to trigger a transaction within this timeframe, underscoring how ownership demographics will continue to shape deal flow well into 2027. Meanwhile, private equity-backed platforms are expected to remain highly active but shift from broad roll-up strategies to targeted bolt-on acquisitions. With many major consolidators already established, the next wave of deals will likely focus on niche technical expertise and geographic infill rather than sheer scale. THE INFLUENCE OF SIZE, SECTOR, & GROWTH Firm size will be an important determinant of who buys and who sells. Survey data shows that mid-sized firms (51-250 employees) are the most likely to pursue or accept acquisition offers in the next three to five years—more than twice as likely as very small firms and significantly more so than the largest enterprises. For many mid-sized practices, M&A offers a practical path to succession, growth capital, or expanded client reach without compromising independence.
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