2026 Services M&A Outlook
Industry report
Demand for outsourced business and essential services continues to benefit from labor constraints, increasing regulatory complexity, and customers’ preference for specialized third-party providers.
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Ali Naseer
Co-Founder & Partner
Ali@FoundersG.com(952) 797-4679Matt Menzi
Co-Founder & Partner
Matt@FoundersG.com(301) 767-5616
EXECUTIVE SUMMARY
Prepared businesses receive stronger buyer interest and valuation support
Essential services remain a priority for financial and strategic buyers, with outcomes determined increasingly by company-specific operating quality.
Demand durability supports buyer interest
Mission-critical and recurring demand remain attractive as buyers assess discretionary exposure and technology-displacement risk.Transaction activity remains uneven
Broad Business Services activity increased, while sponsor-backed middle-market activity continued to reflect disciplined asset selection.Strategic buyers represent most reported activity
Strategic acquirers represented 86.5% of the reported Business Services transaction universe.Platform status requires operating infrastructure
Management depth, systems, recurring revenue, route density and a repeatable integration model determine platform qualification.Scale remains a valuation factor
Reported averages ranged from 6.0x for $10–25 million TEV transactions to 11.3x for $250–500 million TEV transactions.Sale-process execution affects value
Buyer coverage, diligence readiness, transaction structure and timing can produce different outcomes for otherwise comparable businesses.
SECTOR AT A GLANCE
Seven subsectors define the investable services market
The classification follows Founders Group's sector focus and separates subsectors with distinct buyer behavior and valuation factors.
Exhibit 1
| Investable lane | Website linkage | Business model | Primary underwriting lens |
|---|---|---|---|
| MEP / HVAC & building systems | Facility services; repair & maintenance | Maintenance agreements, retrofit, replacement and project work | Labor density; data centers; electrification |
| Fire / life safety & security | Testing, inspection & compliance; facility services | Inspection, monitoring, repair and installation | Code-driven recurrence; route density |
| Route, facility & property | Commercial & route-based; facility services | Pest, landscaping, janitorial and bundled facility services | Local density; retention; branch replication |
| TIC, laboratory & compliance | Testing, inspection & compliance | Testing, certification, lab analysis and environmental compliance | Accreditation; mandated testing; lab utilization |
| Environmental, waste & industrial | Repair & maintenance; facility services | Hazardous waste, industrial cleaning, water and field services | Regulation; disposal access; emergency capability |
| Utility, infrastructure & maintenance | Repair & maintenance | Grid, electrical, road-safety and specialty field services | Backlog; safety; critical infrastructure |
| Professional & tech-enabled | Professional services | Accounting, advisory, compliance, staffing and managed services | Talent; recurring clients; technology-enabled delivery |
MARKET UPDATE
Durable revenue supports transaction activity while credit and exit conditions remain relevant
Current market conditions support transactions, but buyers continue to differentiate businesses by operating quality, risk and scalability.
- 3,999
- Reported U.S. private equity transactions
- $314bn
- Reported private equity capital deployed
- 7.3x
- Reported sponsor middle-market average
Exhibit 2
| Theme | Market interpretation | Required owner evidence |
|---|---|---|
| Revenue durability | Recurring, contractual and mandated services reduce demand uncertainty. | Document renewal rates, cohort retention and price realization. |
| Labor scarcity | Technician and specialist availability can constrain growth, even when demand is healthy. | Show recruiting yield, training capacity, wage inflation and productivity. |
| AI and automation | Physical essential services look insulated; professional services face both productivity upside and delivery-model risk. | Separate measurable workflow gains from unproven product claims. |
| Infrastructure demand | Data-center construction, grid investment and electrification support MEP and utility service backlogs. | Validate backlog conversion, customer concentration and working capital. |
| Credit and exits | Debt is available but still selective; sponsors face pressure to create liquidity from older portfolios. | Expect scrutiny on downside protection and integration capacity. |
PRIVATE DEAL ACTIVITY
Reported sponsor activity remains selective
The latest reported sample included 80 transactions at an average 7.3x enterprise value to adjusted EBITDA.
Exhibit 3
- 80
- Completed sponsor transactions in the latest sample
- 7.3x
- Average purchase price / adjusted EBITDA
- 3.5x
- Total debt / EBITDA; senior debt 2.5x
Interpretation for owners
- Deal counts remain uneven across reporting periods; a single observation should not be interpreted as a sustained recovery.
- The latest reported multiple increased from 6.9x to 7.3x, while leverage remained measured relative to earlier credit conditions.
- For owners, quality and size dispersion remain more informative than the headline average.
BROADER BUSINESS SERVICES
Strategic buyers account for most reported services transactions
The reported dataset is broader than essential services but demonstrates the depth of the buyer universe.
- 1,070
- Reported transactions in the latest dataset
- +32%
- Growth from the prior comparable period
- 10.53x
- Median TEV / EBITDA; decreased from 12.37x
Exhibit 4
Exhibit 5
| Buyer / measure | Reported result | Interpretation |
|---|---|---|
| Strategic buyers | 926 deals / 86.5% | Capability acquisition, cross-selling and digital or compliance services. |
| Financial buyers | 144 deals / 13.5% | Recurring-revenue platforms and scalable outsourced services. |
| Valuation | 1.20x revenue / 10.53x EBITDA | Compression suggests disciplined pricing despite stronger volume. |
VALUATION FRAMEWORK | REPORTED MARKET OBSERVATIONS
Scale remains a significant valuation determinant
Reported sponsor-backed averages increase materially at the upper end of the $10–500 million TEV range.
Exhibit 6
- 7.6x
- Reported average platform buyout multiple
- 6.5x
- Reported average add-on multiple
- 7.0x
- Reported Business Services average
Scale does not replace operating quality
- A larger EBITDA base supports more leverage, a broader buyer universe and lower perceived key-person risk.
- A small target can still earn a strong strategic price when it fills geography, licenses, technicians or a scarce capability.
- Conversely, a nominal platform can be discounted if it lacks systems, management depth or repeatable organic growth.
VALUATION FRAMEWORK | FOUNDERS GROUP INDICATIVE RANGES
Tuck-in and platform ranges overlap because classification depends on capabilities
The ranges are analytical market parameters, not quoted prices or a substitute for company-specific valuation analysis.
Exhibit 7
Exhibit 8
| Lens | What changes the outcome |
|---|---|
| Premium drivers | Recurring or mandated revenue; organic growth; double-digit margins; low concentration; strong retention; dense routes or branches; credible management; clean reporting; proven integration. |
| Discount drivers | Owner dependence; project volatility; weak backlog conversion; customer or technician concentration; safety/compliance exposure; heavy capex; poor systems; unproven adjustments. |
| Structure matters | Rollover equity, earnouts, working-capital mechanics, tax treatment and assumed liabilities can change proceeds even when the headline multiple is unchanged. |
SELECTED ANNOUNCED TRANSACTIONS | SCALED PLATFORMS
Scaled, defensible platforms continue to attract capital
The selected transactions illustrate buyer interest and do not represent an exhaustive market sample.
Exhibit 9
| Target | Buyer / ownership | Subsector | Reported value / multiple |
|---|---|---|---|
| Apex Service Partners | Apollo minority investment; Alpine remains a partner | Home services / MEP | $10bn reported valuation |
 ENTRUST Solutions |  Leidos | Utility engineering | $2.4bn purchase price |
 Alliance Technical Group | Blackstone; seller MSCP | Environmental compliance | Not disclosed |
 Shermco | Blackstone; seller Gryphon | Electrical maintenance | Approx. $1.6bn |
 Summit Companies | BDT & MSD; seller BlackRock LTPC | Fire / life safety | Not disclosed |
| Applied Technical Services | SGS | Testing / inspection | $1.325bn; 11.2x incl. synergies |
| Baker Tilly + Moss Adams | Merger of private accounting platforms | Professional services | $7bn reported transaction |
 Pye-Barker | ADIA and GIC join Altas and Leonard Green | Fire / life safety | Not disclosed |
| Sila Services | Goldman Sachs Alternatives; seller MSCP | HVAC / plumbing / electrical | Not disclosed |
SELECTED ANNOUNCED TRANSACTIONS | ADD-ONS AND CAPABILITIES
Add-on acquisitions continue to target density, licenses and specialized capacity
Strategic rationale is often more observable than valuation because most private add-on transaction values remain undisclosed.
Exhibit 10
| Target | Acquirer | Subsector | Strategic rationale | Reported value / multiple |
|---|---|---|---|---|
| Mechanical Service Systems | PremiStar / Partners Group | Commercial HVAC / MEP | Capability and geographic expansion | Not disclosed |
| Arrow Pest Control | PestCo / TSCP | Route-based pest | Route density and regional expansion | Not disclosed |
| LandGraphics | Osprey / Southfield | Commercial landscaping | Entry into California | Not disclosed |
| Terra Nova Solutions |  Clean Harbors | Wastewater / industrial | Treatment network and capabilities | $225m; 11.8x post-synergy |
| Performance Systems Integration |  Summit Fire Security | Fire / life safety | Regional service density | Not disclosed |
| InfraStripe | Frontline Road Safety / Bain | Road-safety services | Scaled platform combination | Not disclosed |
 Cupertino Electric | Quanta Services | Electrical infrastructure | Data-center and renewables exposure | $1.54bn upfront; ~8.3x EBITDA midpoint* |
 HEPACO | Clean Harbors | Environmental response | Emergency response density | $400m; 11.1x pre- / 7.1x post-synergy* |
*Founders Group calculation using disclosed consideration and matching public EBITDA guidance. Synergy-adjusted figures use the buyer's stated run-rate synergies; calculations may not reflect all transaction adjustments.
SUBSECTOR 1 OF 7
MEP / HVAC and building systems
Commercial maintenance, retrofit and replacement remain attractive when recurring service, rather than one-time construction, supports the margin profile.
- 4.5–7.5x
- Indicative tuck-in EV / EBITDA
- 8.0–12.0x
- Indicative platform EV / EBITDA
- Service agreements + projects
- Core economic model
Exhibit 11
| Lens | Assessment |
|---|---|
| Buyer universe | Apex; Sila; Wrench; PremiStar; Modigent; Crete United; strategic electrical and facilities buyers. |
| Buyer underwriting criteria | Maintenance mix; technician productivity and retention; dispatch and price realization; commercial/residential exposure; branch-level margins; backlog quality; safety. |
| Current market developments | Data-center and electrification demand support specialized electrical and mechanical capacity. Buyers continue to assemble regional density and cross-trade offerings, while scarce technicians limit organic expansion. |
| Principal risks | Project concentration; new-construction cyclicality; warranty exposure; labor availability; working-capital swings. |
Selected transaction evidence
A reported $10 billion minority investment in Apex demonstrates valuation support for scaled service networks. PremiStar's acquisition of Mechanical Service Systems demonstrates continued add-on demand.
SUBSECTOR 2 OF 7
Fire, life safety and security
Code-driven inspection and recurring service can support premium platform valuations when installation exposure and local operations are controlled effectively.
- 6.0–9.0x
- Indicative tuck-in EV / EBITDA
- 10.0–14.0x
- Indicative platform EV / EBITDA
- Inspection + monitoring + service
- Core economic model
Exhibit 12
| Lens | Assessment |
|---|---|
| Buyer universe | Pye-Barker; Summit; Impact Fire; Sciens; RapidFire; APi Group; Johnson Controls. |
| Buyer underwriting criteria | Inspection and monitoring recurrence; service/install mix; license coverage; inspection completion; attach rates; route density; technician credentials; false-alarm and liability controls. |
| Current market developments | Sponsor-backed platforms continue to combine inspection, suppression, alarm and monitoring capabilities. Scale can improve technician utilization, national-account coverage and tuck-in economics. |
| Principal risks | Install-heavy revenue; AHJ and licensing complexity; claims history; fragmented systems; branch integration. |
Selected transaction evidence
BDT & MSD's acquisition of Summit, Summit's subsequent acquisition of Performance Systems Integration and the addition of new capital to Pye-Barker demonstrate continued platform and add-on activity.
SUBSECTOR 3 OF 7
Route-based, facility and property services
Route density and customer retention, rather than recurring invoices alone, determine whether a local service business can scale efficiently.
- 4.5–7.0x
- Indicative tuck-in EV / EBITDA
- 7.5–11.0x
- Indicative platform EV / EBITDA
- Routes / branches + recurring visits
- Core economic model
Exhibit 13
| Lens | Assessment |
|---|---|
| Buyer universe | Anticimex; PestCo; Osprey; Tendit; Rentokil Initial; BrightView; regional facility-services platforms. |
| Buyer underwriting criteria | Revenue per route; drive time; technician utilization; churn; contract repricing; branch contribution; local leadership; weather and seasonality; cross-sell penetration. |
| Current market developments | Pest and commercial landscaping remain fragmented and acquisition-friendly. Buyers are using add-ons to fill route gaps, enter adjacent markets and add specialized maintenance services. |
| Principal risks | Commodity bidding; low switching costs; wage inflation; customer or property-manager concentration; inconsistent branch controls. |
Selected transaction evidence
PestCo's acquisition of Arrow Pest Control and Osprey's acquisition of LandGraphics demonstrate continued demand for route density and geographic expansion. Both transaction values were undisclosed.
SUBSECTOR 4 OF 7
Testing, inspection, certification and laboratory services
Mandated testing, accreditation and technical scarcity support demand, but buyers scrutinize utilization and network complexity.
- 6.0–9.0x
- Indicative tuck-in EV / EBITDA
- 10.0–14.0x
- Indicative platform EV / EBITDA
- Mandated tests + lab throughput
- Core economic model
Exhibit 14
| Lens | Assessment |
|---|---|
| Buyer universe | SGS; Bureau Veritas; Intertek; Element; Pace Analytical; Alliance Technical Group; Acuren. |
| Buyer underwriting criteria | Regulatory or customer mandate; accreditation; recurring sampling cadence; lab and field utilization; turnaround time; method mix; customer concentration; capex and chain of custody. |
| Current market developments | Global TIC leaders are expanding U.S. scale, while sponsor-backed platforms continue to build environmental and laboratory networks. Compliance demand tends to be resilient, but integration requires technical discipline. |
| Principal risks | Accreditation transfer; lab underutilization; analytical instrument capex; complex quality systems; project-based consulting mixed into recurring testing. |
Selected transaction evidence
SGS agreed to acquire Applied Technical Services for $1.325 billion and stated an 11.2x EBITDA multiple including run-rate synergies. Alliance Technical Group was acquired by Blackstone.
SUBSECTOR 5 OF 7
Environmental, waste and industrial services
Regulation, disposal access and emergency-response capability support defensible demand, while liability and capital intensity increase diligence risk.
- 5.0–8.0x
- Indicative tuck-in EV / EBITDA
- 8.0–12.0x
- Indicative platform EV / EBITDA
- Recurring routes + regulated projects
- Core economic model
Exhibit 15
| Lens | Assessment |
|---|---|
| Buyer universe | Clean Harbors; Veolia; WM; Republic; Waste Connections; GFL; Denali; VLS; LRS. |
| Buyer underwriting criteria | Waste stream and end market; recurring vs emergency revenue; permits; disposal or treatment access; environmental liabilities; fleet/capex; safety; pricing; route density. |
| Current market developments | Large strategic buyers are adding hazardous-waste capacity and vertically integrated treatment networks. Private platforms remain active in organics, water, industrial cleaning and specialty waste. |
| Principal risks | Legacy contamination; permit transfer; environmental reserves; volatile event work; disposal concentration; fleet replacement. |
Selected transaction evidence
Veolia completed its $3.0 billion acquisition of Clean Earth at 9.8x EBITDA after run-rate synergies. Clean Harbors acquired Terra Nova for $225 million at 11.8x post-synergy EBITDA.
SUBSECTOR 6 OF 7
Utility, infrastructure and specialty maintenance
Critical infrastructure and data-center demand support backlogs, while customer concentration, safety and working capital determine value realization.
- 5.0–8.0x
- Indicative tuck-in EV / EBITDA
- 8.5–12.5x
- Indicative platform EV / EBITDA
- Program backlog + field execution
- Core economic model
Exhibit 16
| Lens | Assessment |
|---|---|
| Buyer universe | Artera; Shermco; Frontline Road Safety; Quanta Services; MasTec; Primoris; engineering and utility strategic buyers. |
| Buyer underwriting criteria | Backlog quality and duration; master service agreements; customer/program concentration; crew availability; safety record; change orders; cash conversion; bonding; equipment intensity. |
| Current market developments | Grid hardening, electrification and data-center construction support electrical engineering and field services. Buyers seek scarce labor and technical capacity in addition to geographic expansion. |
| Principal risks | Backlog cancellation; storm-event volatility; utility procurement cycles; claims; project overruns; working-capital absorption. |
Selected transaction evidence
Leidos completed its $2.4 billion acquisition of ENTRUST. Blackstone agreed to acquire Shermco for approximately $1.6 billion.
SUBSECTOR 7 OF 7
Professional and tech-enabled services
Recurring clients and specialized talent remain valuable; AI readiness and delivery-model economics are central diligence considerations.
- 5.0–8.5x
- Indicative tuck-in EV / EBITDA
- 9.0–14.0x
- Indicative platform EV / EBITDA
- People + recurring client relationships
- Core economic model
Exhibit 17
| Lens | Assessment |
|---|---|
| Buyer universe | Grant Thornton; Baker Tilly; Citrin Cooperman; Sikich; Crete Professionals Alliance; Wipfli; larger advisory and consulting strategic buyers. |
| Buyer underwriting criteria | Client retention; recurring vs project work; realization and utilization; partner or seller concentration; talent retention; offshore mix; cross-sell; technology and data security; organic growth. |
| Current market developments | Accounting consolidation accelerated as sponsors used alternative practice structures. Recent reporting identified 194 transactions in the prior full period and 62 in the current partial period, with financial buyers representing 54.8% of current-period volume. |
| Principal risks | Partner economics; client portability; audit-independence structure; wage pressure; AI displacement; inconsistent technology adoption. |
Selected transaction evidence
The announced Baker Tilly–Moss Adams combination was reported as a $7 billion transaction. Sponsor capital also supported Grant Thornton, Citrin Cooperman, Sikich and Crete Professionals Alliance.
CONSOLIDATOR LANDSCAPE
Buyer participation and acquisition criteria vary by subsector
Representative consolidators and ownership reflect the 2H26 market; the list is not exhaustive.
Exhibit 18
| Lane | Representative sponsor-backed consolidators | Representative strategic / public | Typical acquisition logic |
|---|---|---|---|
| MEP / HVAC | Apex (Alpine / Apollo); Sila (Goldman); Wrench (LGP / TSG / Oak Hill); PremiStar (Partners Group); Modigent (OMERS); Crete (Ridgemont) | Quanta; Comfort Systems | Technicians, local density, commercial maintenance and cross-sell |
| Fire / life safety | Pye-Barker (Altas / LGP + ADIA / GIC); Summit (BDT & MSD); Impact Fire (Blackstone); Sciens (Carlyle); RapidFire (Concentric) | Johnson Controls; APi Group | Inspection recurrence, monitoring and code compliance |
| Route / facility | Anticimex (EQT Future consortium); PestCo (TSCP); Osprey (Southfield); Tendit (Osceola) | Rentokil Initial; BrightView | Route and branch density, churn and local leadership |
| TIC / laboratory | Element (Temasek); Pace Analytical (LGP / Aurora); Alliance Technical Group (Blackstone) | SGS; Bureau Veritas; Intertek; Acuren | Accreditation, lab utilization and mandated demand |
| Environmental / waste | Denali (TPG); VLS (I Squared); LRS (Macquarie) | Clean Harbors; Veolia; WM; Republic; Waste Connections; GFL | Disposal access, compliance, route density and response capability |
| Utility / maintenance | Artera (CD&R); Shermco (Blackstone); Frontline Road Safety (Bain) | Quanta; MasTec; Primoris | Backlog quality, safety, labor capacity and critical infrastructure |
| Professional / tech-enabled | Grant Thornton (New Mountain); Baker Tilly (H&F / Valeas); Citrin Cooperman (Blackstone); Sikich (Bain); Crete PA (Thrive / ZBS / Bessemer) | Marsh McLennan; Accenture | Talent retention, recurring clients, specialization and technology |
OWNER PREPARATION AND MARKET OUTLOOK
Required evidence distinguishes a platform from an add-on candidate
Near-term market conditions should remain constructive for durable businesses, with outcomes varying by subsector, scale and sale readiness.
Exhibit 19
| Preparation priority | Required evidence | |
|---|---|---|
| 1 | Prove revenue quality | Segment recurring, contractual, break/fix and project revenue. Reconcile renewal, churn, backlog and pricing data to the financials. |
| 2 | Normalize EBITDA carefully | Prepare support for owner items, one-time costs, run-rate hires and acquisitions. Aggressive add-backs usually create distrust, not value. |
| 3 | Measure the operating engine | Track technician productivity, route density, branch contribution, utilization, safety, quality and customer concentration. |
| 4 | Reduce owner dependence | Install management accountability, documented processes and a decision cadence that does not stop when the owner leaves the room. |
| 5 | Prepare for buyer-specific diligence | Anticipate licensing, environmental, wage-and-hour, cyber, tax, insurance and quality-of-earnings questions. |
| 6 | Test the buyer universe | Compare sponsor platforms, strategics and sponsor-backed consolidators on price, certainty, rollover, culture and post-close role. |
Founders Group outlook
- Fire/life safety, TIC/compliance and dense MEP platforms should retain premium interest when revenue recurrence and organic growth are visible.
- Route and facility services should remain active, but labor, churn and density will separate high-quality networks from commodity providers.
- Professional services will keep consolidating; AI readiness and talent economics will become increasingly important diligence items.
- The strongest private processes should benefit from both strategic demand and sponsors' need to deploy capital and create portfolio liquidity.
ABOUT THIS REPORT
Use this report as market context, not as a valuation opinion
A 2H26 review of private deal activity, consolidators, valuation parameters and owner preparation priorities.
Methodology
Market observations reflect the relevant dataset definitions and periods. Disclosed multiples are shown only when transaction value and a matching EBITDA measure were public. Founders Group indicative ranges triangulate reported middle-market observations, disclosed precedents and subsector judgment; they should not be read as a fairness opinion or valuation conclusion.
- 1
- Reported market observations Private-market data, shown using each dataset's defined sample and period.
- 2
- Disclosed transactions Values and multiples are presented only when the relevant transaction metrics were public.
- 3
- Indicative ranges Founders Group judgment based on size, quality, buyer behavior and subsector characteristics.
Exhibit 20
| Term | Meaning in this report |
|---|---|
| Tuck-in | A smaller acquisition integrated into an existing platform. Strategic fit, geography, licenses, technicians and customer density may influence value. |
| Platform | A business capable of standing alone as a buyer's sector anchor, with management, systems and a repeatable growth model. |
| Enterprise value / EBITDA | A valuation ratio comparing enterprise value with adjusted earnings before interest, taxes, depreciation and amortization. |
| Indicative range | An analytical market parameter rather than a quoted price. Actual outcomes depend on company-specific facts, timing, structure and process. |
Disclaimer
This material is for general informational purposes only and does not constitute investment, legal, tax, accounting or valuation advice, an offer to sell, or a solicitation to buy any security. Information is believed reliable but has not been independently verified and may be incomplete. Actual transaction outcomes depend on company-specific facts, market conditions, structure, timing and process. Past transactions and market observations are not indicative of future results.
Founders Group
Ali Naseer
Co-Founder & Partner
Ali@FoundersG.com(952) 797-4679Matt Menzi
Co-Founder & Partner
Matt@FoundersG.com(301) 767-5616
San Francisco · Denver · Minneapolis · New Yorkwww.foundersg.com