The current landscape for specialized contractors feels like a modern-day gold rush. We are witnessing an AI-driven infrastructure supercycle transforming data centers from standard commercial builds into mission-critical industrial powerhouses. For middle-market business owners serving business construction (in the architectural, engineering, mechanical, electrical, or plumbing trades, for example), this shift has led to continued increases in valuations in an already active arena.
AI & Data Center Boom Impact on Infrastructure Services
Private equity’s focus on HVAC and other mechanical, electrical, and plumbing trades is anything but new in the residential space, as roll-up activity has been active for several years. In the commercial space., these essential, non-discretionary services are not only important to new construction but also for ongoing building maintenance, representing stable recurring revenue. And the data center boom has only accelerated mergers & acquisitions activity in the commercial space, with private equity investment in data center-related services tripled from 2023 to 2024.
The AI “Gold Rush” is fueled by a staggering increase in data center power demand. Goldman Sachs projects a 165% increase through 2030. Because AI workloads require significantly more cooling and power than traditional data storage, the contractors capable of building and maintaining these systems are in incredibly high demand. And as a result, an increase in the need for the related services to build sophisticated & efficient data centers.
Already a stable investment for private equity, this boom has only increased the number of buyers and, as a result, the valuations they pay. Whether you believe the data center boom will bust faster than expected or will last, there is inherent stability, which is why we see firms in this space trading at two to three times the standard industry multiple.
How the Data Center Trend is shaping M&A in the Infrastructure Services Segment
As the market heats up, the structure of deals are evolving. Capturing the data center demand requires not only scale but capacity, speed to market, and purchasing power. That’s why financial and strategic buyers alike are consolidating across the value chain; increasingly interested in building a “one-stop shop” model to serve the industry. This means combining engineering, construction, and maintenance services to deliver more comprehensive design-build capabilities.
The trend to date has been for private equity firms and strategics to build roll-ups of regional firms to achieve national scale. Now we expect to see more combinations where an engineering firm, a construction firm, and a specialized HVAC firm come together to become indispensable to data center operators. This vertical integration trend makes firms with revenues between $20 million and $200 million prime targets for larger platforms looking to round out their capabilities. The end-to-end service model creates a competitive edge in winning contracts, with the scale and purchasing power to ensure customers secure the necessary parts and equipment both affordably and on time.
Why Selling May Be an Attractive Option for Growth
While the uptick in demand may expand opportunity for your individual success, competition is also getting incredibly sharp. Customers demand accountability throughout the supply chain; larger players are now competing for business with better supplier relationships. And in an environment of 18-to-24-month lead times, purchasing power is increasingly important. Selling may be the right option to enable you to capture a slice of this new growth boom while limiting your personal risk.
We often advise our clients to consider selling not as an exit but rather as a key milestone in the growth trajectory of their business, which gains a partner for ongoing growth, enables scale to win more deals, and provides access to powerful technology to enhance performance. In the meantime, you will gain partial liquidity and reduce personal risk, all while getting an opportunity for a second bite of the apple in the coming years. The outcome depends on finding the right partner and structuring the right deal for you, your people, and your business.
Proving Operational Independence to Secure Record Multiples
One of the most significant challenges for founder-led firms is proving the business can thrive without the constant presence of the owner. In high-stakes data center projects, buyers perform a “stress test” on your leadership team and specialized workforce to ensure they are not a flight risk post-sale.
Your exit strategy must highlight your human capital. In these environments, uptime is non-negotiable, and your team’s ability to manage complex layouts and redundant systems is a massive asset. To command record 8x or 9x EBITDA multiples, a firm must demonstrate that its culture and technical expertise are baked into the organization, not just the founder. We have seen how scale improves economics, attracts better talent, and enhances margins—all of which boost your final valuation.
A command of your metrics will be critical, demonstrating your business as a quality asset that performs on-time, within scope, with a strong backlog / pipeline of work, and healthy margins.
Preparing a Specialized Contracting Business for Sale
In a hot market, there is a temptation to rush, but we always advise our clients to “slow down to speed up.” Proper deal structure and thorough vetting ensure both parties are satisfied once the ink is dry. A successful sale requires meticulous financial preparation and a deep backlog of work with minimal customer concentration.
By taking the time to clear legal and financial hurdles early, we prevent the “time kills deals” syndrome, which often plagues poorly managed transactions. Building a specialized firm requires years of sacrifice. If your business is currently supporting the data center infrastructure boom, you have a unique opportunity to capitalize on a historic market cycle. Our team at Walden M&A is here to help you navigate these complexities and ensure you receive the value your hard work deserves.
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