Construction & Infrastructure M&A:
2026 year-to-date outlook.

Did the record pace carry into 2026?

2025 closed as the strongest year for construction and infrastructure private equity activity on record. The relevant question entering 2026 is direction: did the pace hold, or did it normalize off an exceptional base? Through the first five months of 2026, deal activity tracked at approximately 368 transactions, down roughly 17% from the 442 deals recorded during the comparable 2025 period, according to PitchBook. What matters more for a Cleveland owner is that the demand under the cycle is structural rather than cyclical. Infrastructure dollars continue to flow into projects on multi-year timelines, grid modernization and electrification are early in long build-outs, and the datacenter expansion tied to AI keeps adding enormous demand for power, design, site work, and specialty trades. For our region this is the point that matters: the Great Lakes economy is dense with exactly the businesses buyers want, namely family-owned and founder-led specialty contractors, engineering services firms, and building products manufacturers. Many of those categories are highly fragmented, which is precisely what attracts platform investors building scale through add-on acquisitions. Whether the headline count is up or flat so far this year, buyer appetite for quality regional operators has not faded.

Where the demand is concentrated

Within the vertical, specialty construction continues to take the largest share of activity. Plumbing, electrical, interiors, metal fabrication, concrete, and roofing all sit in fragmented markets full of strong regional operators, which is the classic setup for a roll-up. Electrical and mechanical contracting in particular keep drawing sustained interest, supported by the same electrification and datacenter demand driving the broader cycle, while infrastructure-tied work in utility, transmission, water, and transportation benefits from public funding cycles that run for years. We saw this dynamic up close. In October 2025 we advised on the sale of McClintock Electric, a multi-generational Northern Ohio electrical and technology contractor, to Kelso Industries, and the buyer interest in that process reflected exactly what the national picture shows: well-run electrical contractors with diversified end markets and clean financials command strong attention. A word on multiples is worth adding, because the headline numbers can mislead an owner. National coverage features large strategic deals printing in the high teens on EBITDA. Those are national, public-scale transactions. For middle-market private construction and infrastructure businesses, the realistic range we have observed held closer to 5x to 8x EBITDA. That gap is not a penalty for being smaller. It reflects the risk profile a buyer assigns to a single-region contractor versus a national platform. The encouraging part for owners is that the levers which move you toward the top of your range are largely within your control.

Backlog quality decides the number

If there is one differentiator between sellers who clear the market at firm prices and those who struggle, it is backlog quality. Buyers pay up for businesses with diversified customers, documented processes, repeatable revenue, and a backlog they can underwrite with confidence. Customer concentration remains the most common reason a process stalls or a price comes down at the table.

The financing backdrop matters because cheaper, more available debt supports buyer appetite and underwrites higher valuations. Following three 25-basis-point rate cuts in late 2025, the Federal Reserve has held the federal funds target range at 3.50%–3.75% throughout 2026, maintaining a cautious, data-dependent posture as it balances inflation risks against continued economic growth. Public indicators remain mixed and selective rather than uniformly strong: total U.S. construction spending remained near record levels at $2.17 trillion in April 2026, with public construction spending reaching $532.7 billion and highway construction spending totaling $149.6 billion. Conditions remain softer across certain private nonresidential categories, while the clearest strength continues to be concentrated in power, grid, and infrastructure-tied work. For an owner considering a sale or recapitalization in the next 12 to 18 months, the practical takeaway is to start preparation now. The work done before a process begins, namely cleaning up the backlog schedule, reducing customer concentration where possible, documenting the management structure, and getting the financials ready for diligence, is consistently where the final number is decided.