M&A activity snapshot
A&E consolidation is running at a record pace. Morrissey Goodale reports that 2025 was the first year on record with more than 500 completed domestic transactions across architecture, engineering and environmental consulting. Its tracker showed 514 U.S. deals in the latest 12 months, up 6%, as of October 2, 2026.
Private equity is now the center of the market. Morrissey Goodale says PE-backed acquirers and/or PE recaps now account for more than half of all design and environmental consulting firm deals. Serial acquirers doing two or more deals a year have tripled since 2016, and the median buyer has nearly doubled in size in five years.
Trackers disagree on the size of the market because they count different deals. Capstone Partners counted 361 AEC services transactions in 2025, up 10.1%, with PE buyers at 38.3% of the total. Both sources show the same direction: more deals, and a rising sponsor share.
This page covers design and consulting work: architecture, engineering, environmental consulting, geotechnical and materials testing, surveying and geospatial, and construction management. Contractors that build the work sit under Construction.
Who is buying
PE-backed platforms. Sponsors buy a scaled platform, then add regional firms. Kelso & Company and ARA Services Partners acquired Galloway & Company, an architecture and engineering firm with 18% average annual growth over 11 years. Capstone counted 117 PE add-ons in 2025, up 34.5%.
Sponsor-to-sponsor recaps. Platforms trade between funds. In one June 2026 week, 17 of 19 announced deals involved financial sponsors or PE-backed buyers, including Leonard Green's purchase of Cumming Group from New Mountain Capital. Morrissey Goodale expects most PE exits to be recapitalizations to other PE firms.
Public consolidators. WSP agreed to buy TRC from Warburg Pincus funds for a total cash purchase price of US$3.3 billion. Acuren's merger with NV5 carried total consideration of approximately $1.7 billion. Bowman Consulting Group completed six transactions in 2025.
International buyers. Morrissey Goodale counts 50-plus ENR firms sold or recapitalized to overseas interests over the last 24 months, a record. WSP's TRC deal is the largest recent example.
Employee-owned and private strategics. Private strategics still made 47.8% of sector deal activity in 2025, even as their deal count fell 9%. Zweig named Salas O'Brien, IMEG, SLR, Bowman and Celnor at seven deals each, with Montrose Environmental Group and NV5 at six, through Q3 2024.
What buyers look for
Licensed people and backlog. Labor is the binding constraint. ACEC's Q3 2026 survey found eighty-eight percent of firms report at least one open position, with a median backlog of 12 months. Buyers are often acquiring licensed engineers they cannot hire, plus the backlog those engineers carry.
Growth end markets. Power and energy, data centers, water and transportation draw the most interest. Capstone cites an ACEC finding that 48% of firms reported a workload pipeline of one or more years, and expects strong demand across those segments to continue.
Geography and scale. For "roads and roofs" firms, Morrissey Goodale names Texas and the Southeast the most targeted regions. It also reports that firms above $100 million in revenue are seeing values rise fastest.
Regulatory demand. Environmental buyers track rules that create years of testing and design work. EPA's PFAS drinking-water rule sets PFOA and PFOS limits at 4.0 ppt, with a proposed option to extend compliance to 2031.
What makes a strong company
A&E firms that draw competitive interest typically show:
- Net service revenue (NSR), not gross revenue, as the reported top line, with subconsultant pass-throughs stripped out.
- Twelve months or more of backlog, in line with the 12-month median ACEC reports.
- No client dependence: Zweig warns about the owner whose firm has one client accounting for 65% of their revenue.
- More than one licensed principal in each discipline and state, so a sale does not hinge on one engineer or architect of record.
- An ownership structure that meets state licensure rules after closing (see below).
Valuation and deal structure
Size drives value more than discipline. Capstone puts disclosed AEC deals at an average 13.2x EV/EBITDA in 2025, up from 11.1x. Those are mostly large transactions. Zweig's 2025 survey of firm values, which spans internal transitions and pro-rata pricing, shows value/EBITDA of 4.28 and value/NSR of 0.63.
Reported large deals sit in the low-to-mid teens. Capstone puts WSP/TRC at 15.9x EV/EBITDA and Qualus's purchase of Wood's T&D engineering unit at 14.9x. WSP itself priced TRC at 14.5x TRC's CY2026E adjusted EBITDA, before expected cost savings. Acuren/NV5 priced at approximately 10.3x 2025E consensus adjusted EBITDA.
Ownership rules shape structure. Arizona caps unlicensed owners of a professional LLC at no more than 49% of the membership interests entitled to vote. Massachusetts requires each shareholder of a professional corporation to be duly licensed. PE buyers must fit their structure to each state where the target practices.
Earnouts move a lot of value past closing. Zweig describes sellers who discovered half their money depended on hitting earnout targets controlled by the buyer. Compare cash at close, not the headline multiple. To see where your own numbers sit, use the valuation tool.
Subindustries
Pricing and buyers differ by discipline. Power, water and environmental work draw the deepest sponsor interest, while small architecture and surveying firms face a wider value gap. Each page below covers its own buyers, licensure rules and value drivers.