By the end of 2025, M&A activity increased in the construction sector. Construction, consulting and contech companies were busy during the second half of the year acquiring competitors or complementary companies.
So where does this leave the construction industry in 2026? Sean Auton, co-managing partner of the Chicago office of the Kilpatrick law firm, doesn’t see activity slowing down.
Auton then discusses M&A activity over the past year and going forward, the big sectors for M&A targets and how construction companies fit into the mix.
Editor’s Note: This interview has been edited for brevity and clarity.
Construction Immersion: What did you see for M&A among infrastructure, engineering and construction companies in 2025?
SEAN’S CAR: You’re starting to see things pick up a little bit.
There was a huge upswing, particularly with engineering firms, that occurred after the infrastructure bill was passed. A very exciting opportunity, because you had over a trillion dollars coming in from the federal government, and a lot of those dollars are equivalent to dollars, so the states were going to put in another trillion dollars. So it became a very hot area.
Sean Auton
Permission granted by Kilpatrick
It cooled a bit with the general cooling of the M&A market in the second half of 2024 and early 2025, but probably from June 2025, it continues to grow and increase.
So I anticipate that we’re going to see a lot more, we’re going to see multiples go up a lot, and we’re going to see companies become much more aggressive in trying to make acquisitions.
In the second half of the year, for the construction sector, we saw an increase. What do you think contributed to this?
As I said, the increase really started during the summer, where people got comfortable again.
There was an unusual calm. Part of this was so much activity that occurred between 2021 and 2023 that 2024 was a cooler year.
It may have been an average M&A year, but people were used to well above average activity. I think people finally had confidence in the market space and really started deploying capital.
The world of mergers and acquisitions saw it in all systems, but certainly in construction, it is being seen a lot in engineering companies. You mentioned a couple of big multinationals. We represent a large multinational that is very aggressive, eager to enter the North American market and in particular the USA.
If you have engineering companies that are located overseas or have a lot of foreign assets, they try to deploy as much money as possible to the US for a variety of reasons. So you’re seeing very aggressive attempts to acquire construction in the US
It could be that companies have a portfolio but want to add to it. Businesses may need to fill a service they don’t have. Either you need to reallocate capital from other markets, or it will be much more expensive to do business in the US
Part of this is that foreign engineering firms are beginning to reorganize as independent US divisions as tariff and tax changes roll in.
What you pay in taxes on US sourced income, if you can keep it in the US, will be lower than trying to repatriate the income to your home country, especially Europe, right now.
Will this trend continue in 2026?
I think as long as you have the current administration, yes.
So, with the caveat that the midterm elections could change things, I would anticipate seeing this trend over the next three years.
Depending on how dramatic the change is in November, you might see a little bit of a slowdown, but most of what you’ve been seeing on the tariff and tax side has been executive action. These have not been changes in congressional law.
Without these tariff and tax positions, will we see the opposite trends?
I think you would see a continuation of what you were seeing before, in different professional services industries. The US and professional services in general, not just engineering, but we’ll focus on engineering for a moment, tend to be much more profitable.
So the Infrastructure Act would certainly drive a lot of work here, bigger projects, very profitable work. Much more profitable than the work that will be done in Europe.
One area that I think will probably be the hottest area over the next few years will be nuclear and the engineering around that. The energy demands that are emerging in most countries, especially in the US, will force us to go back to nuclear. This huge energy demand in the US, driven by things like data centers, is the main example that people are seeing.
Do you see construction companies getting swept up in this M&A activity?
If you have a specialty in being able to build anything that touches data centers, they are the most important element. These are the new boxes that appear. Everyone is everywhere in data centers. So this will continue.
Again, this is adjacent energy, but this will also be part of it.
And again, while all that’s going on, in the background, you’ve got $2 trillion being spent on US infrastructure. Roads, bridges, airports, terminal facilities, everything else. So we have a blast with data and power issues. And by the way, we’re also spending a couple of trillion dollars just on very traditional engineering projects.
