M&A activity snapshot
Construction M&A grew for a third straight year in 2025. Capstone Partners counted 562 construction services transactions, an 18.2% increase from 2024, and private equity made 54.3% of them, the first year PE buyers outnumbered strategics. Sponsors formed 68 new platforms and completed 237 sponsor-backed deals.
Most activity is in the specialty trades. Subcontractor deals rose 38.6% to 366, or 65.1% of the total. Capstone names Comfort Systems USA, Installed Building Products, and TopBuild as public consolidators whose roll-up pipelines remained strong heading into 2026. At the top end, public buyers did every 2025 deal above $500 million of enterprise value, $7.1 billion in all.
The market is large and fragmented. AGC counts more than 919,000 construction establishments employing 8.0 million people as of early 2023. FMI counts more than 70,000 electrical contracting firms alone, with only 15-20 national players and investment platforms.
This industry covers commercial, industrial, and civil general contracting and the specialty trades that build those projects. Residential trades selling directly to homeowners are covered under Home Services.
Who is buying
PE platforms and add-on buyers. Capstone attributes the 2025 jump in sponsor deals to easing cost of capital and limited-partner pressure to deploy dry powder. Large commercial service platforms change hands between sponsors: Bain Capital and Mubadala bought Service Logic, a commercial HVAC platform with over 140 locations, from Leonard Green.
Public specialty consolidators. EMCOR paid $865 million for Miller Electric, and APi Group paid about $570 million for Elevated Facility Services, buying it from a PE fund. Sterling Infrastructure agreed to buy CEC Facilities Group for $505 million upfront plus an earn-out.
Infrastructure and materials strategics. Paving and aggregates companies buy integrated civil contractors, as when Granite paid $710 million for Warren Paving and Papich. Utility and telecom contractors also buy data-center electrical contractors; see Commercial Specialty Trade Contractors.
Foreign builders and larger GCs. Japanese contractors and national construction managers buy regional general contractors to enter new markets. See General Building Contractors.
What buyers look for
Backlog in the growing segments. Construction spending is flat to down overall, so buyers pay for backlog where demand is rising. ABC members working on data-center projects reported 11.0 months of backlog against 7.8 months for others, and AGC's 2026 survey found contractors' highest net optimism, 57 percent, for data centers.
Retained skilled labor. Labor is the binding constraint. ABC estimates the industry needs 349,000 net new workers in 2026, and 82% of firms in AGC's survey report a hard time filling hourly craft positions. A buyer acquiring a contractor is often acquiring its crews and licensed supervisors.
Recurring service revenue. Buyers value service, maintenance, and retrofit work because it repeats, unlike one-off bid construction. The commercial MEP page shows the margin gap at one public consolidator.
Transferable bonding and licenses. Surety programs rest on the owners' personal indemnity, since sureties typically require principals and their spouses to sign the indemnity agreement. State contractor licenses often sit with a qualifying individual. Both must carry over to the new owner.
What makes a strong company
Across construction trades, a contractor that commands a premium typically has:
- Twelve months or more of signed backlog, weighted to growing end markets such as data centers, power, and healthcare.
- A meaningful share of service, maintenance, or owner-direct revenue, not only bid work.
- Consistent project-level margins, with no history of large write-downs.
- Licensed supervisors and foremen committed beyond closing, and crew retention data to show it.
- A surety program with headroom, and owners prepared to work through the indemnity transfer.
- No single customer, general contractor, or builder large enough to sink a year if lost.
Valuation and deal structure
Multiples vary more by trade and buyer than by any industry average. Capstone reports that from 2018 to 2025 PE buyers paid an average 10.6x EV/EBITDA and strategics 7.5x. In 2025's large specialty deals, Capstone puts Legence/Bowers at 6.6x and Dycom's data-center electrical purchase at 9.7x. It also recorded EMCOR/Miller Electric at 10.6x and Sterling/CEC at 12.6x EV/EBITDA.
Public construction stocks trade far above private deals. The same Capstone report puts its public construction services index at a record 18.9x LTM EBITDA, against an index average of 13.2x. That gap gives public buyers room to pay double-digit multiples for private targets. General contractors sit at the other end: Tutor Perini traded at 0.7x revenue with no meaningful EBITDA multiple.
Earnouts and stock are common. Sterling's CEC deal combined $450 million in cash, $55 million in stock, and an earn-out through 2029. Comfort Systems' filings describe additional payments to sellers contingent on profitability targets. To see where your own numbers sit, use the valuation tool.
Subindustries
Construction M&A behaves very differently by trade. Specialty trades and civil contractors with owned materials draw the highest multiples; general contractors and small finishing trades the lowest. Each page below covers its own buyers, deals, and value drivers.