M&A activity snapshot
Subcontractors drove construction deal growth in 2025. Capstone Partners counted 366 subcontractor transactions in 2025, up 38.6% year over year, inside a construction-services total of 562 deals. Electrical contracting is the hottest trade within that: FMI Capital Advisors counted 30 "pure-play" electrical contractor acquisitions in 2024 and 10 PE-backed platforms consolidating the space.
This page covers mechanical, electrical, and plumbing (MEP) subcontractors that build and service commercial, industrial, and multifamily buildings under NAICS 238210 and 238220. Residential service businesses that sell directly to homeowners trade on different economics and are covered under Home Services.
The deal sizes are large because the buyers are large. EMCOR paid $865 million in cash for Miller Electric, a Southeastern electrical contractor it expected to produce about $805 million of revenue and $80 million of adjusted EBITDA in 2024. Quanta paid about $1.66 billion in cash plus Quanta stock valued at $216.3 million for Cupertino Electric in July 2024. Dycom agreed to buy a Mid-Atlantic data-center electrical contractor at a $1.95 billion valuation in November 2025.
Who is buying
Public MEP strategics. Comfort Systems USA has been a repeat buyer. Its filings show Century Contractors for $84.2 million in January 2025, Feyen Zylstra ($109.8 million) and Meisner Electric ($74.9 million) in October 2025, and R.C. Hunt Electric for $206.0 million in May 2026. Limbach bought Pioneer Power, a formerly 100% ESOP-owned contractor, for $66.1 million.
PE-backed platforms. Blackstone-controlled Legence agreed to buy The Bowers Group for about $475 million, a union mechanical and plumbing contractor with about 1,700 employees. Below that tier, the FMI count of 10 PE platforms in electrical contracting alone shows how many sponsor-backed buyers are looking for add-ons.
Infrastructure contractors moving into buildings. Quanta (utility and grid) and Dycom (telecom) both bought data-center electrical contractors. Their thesis is to follow their customers' capital spending from the grid into the building.
What buyers look for
Backlog in the right end markets. Buyers read backlog first. Comfort Systems' backlog grew from $5.68 billion in September 2024 to $9.38 billion in September 2025, and then to $14.06 billion by June 2026. The demand is concentrated: private data-center construction ran at an $84.95 billion annual rate in August 2026, up 73.2% year over year, while manufacturing construction fell 6.5% in 2025.
Owner-direct and service revenue. Work contracted directly with building owners earns more than work bid through a general contractor. At Limbach, owner-direct revenue was 75.1% of 2025 revenue at a 26.7% gross margin, versus 24.5% for general-contractor-relationship work.
Licensed, retained craft labor. In most states the license sits with a person. Texas, for example, requires that an electrical contractor be a licensed master electrician or employ one. The labor pool is tight: BLS projects about 72,700 electrician openings each year over the next decade, and ABC estimates the industry needs 349,000 net new workers in 2026.
Fabrication capacity. Prefabrication shops that build assemblies off site let a buyer move more work through the same crews. Legence cited over 370,000 square feet of fabrication capacity as a reason for buying Bowers, alongside roughly $1.3 billion of backlog and awarded contracts.
What makes a strong company
A commercial MEP contractor that draws strategic and platform interest typically shows:
- Signed backlog of a year or more, weighted to data centers, healthcare, or other sectors still growing in the Census data, rather than a single general contractor's pipeline.
- A meaningful share of service, retrofit, and owner-direct work, which carries higher margins than plan-and-spec bid work.
- EBITDA margins that hold up. The Dycom target was reported at mid-to-high-teens adjusted EBITDA margins with backlog above $1.0 billion, and that is the top of the market, not the norm.
- Master licenses held by more than one person, with license holders committed past closing.
- Foremen and project managers who run jobs without the owner on site.
- A clean safety record and bonding history that a buyer's surety and insurers will accept.
Valuation and deal structure
Two 2025 deals have multiples stated by a third party: Capstone puts Legence/Bowers at 6.6x EV/EBITDA and Dycom's data-center electrical deal at 9.7x EV/EBITDA. Across all construction from 2018 to 2025, Capstone reports PE buyers paid an average 10.6x EV/EBITDA and strategics 7.5x. Bowers itself reported $72 million of EBITDA on about $767 million of revenue for the year to September 2025.
Smaller deals have less disclosure. Comfort Systems said its two October 2025 electrical acquisitions together add over $200 million of revenue and $15 to $20 million of EBITDA for $184.7 million combined ($109.8 million plus $74.9 million), an implied 9x-12x by Axia's arithmetic. Limbach expects Pioneer Power to contribute about $120 million of revenue and $10 million of adjusted EBITDA, an implied 6.6x on a forward basis by Axia's arithmetic. No reliable published multiple series exists for MEP contractors below $10 million of EBITDA; expect lower multiples there than in the deals above.
Consideration is rarely all cash. Legence's Bowers price combined $325 million in cash, about $100 million in Legence stock, and $50 million in deferred consideration. Comfort Systems paid for both Century and Hunt with a mix of cash at closing, notes payable to the former owners, and an earn-out. To check where your own numbers sit before talking to buyers, use the valuation tool.
Outlook
Expect public strategics to keep buying through 2027. Comfort Systems' backlog has more than doubled in under two years. Data-center spending is the swing factor. If the 73.2% year-over-year growth in the Census data slows, multiples for data-center-heavy contractors will compress faster than for service-heavy ones.
Labor will stay the constraint. With ABC estimating 349,000 workers needed in 2026 and 456,000 in 2027, buyers will keep paying for licensed crews they cannot hire. For the wider construction picture, see Construction & Specialty Contracting M&A. For how buyers build target lists in fragmented trades, see how to build an M&A target list.