Why Private Equity Keeps Outbidding Everyone for Electrical Contractors

The question I get from electrical contractors isn't "are buyers interested" - it's "why are they paying this much?" The answer comes down to one structural trend that makes electrical work a rare combination of essential and growing.

  • PE share of deals: ~75% of electrical contractor M&A
  • $3M EBITDA shops: ~6.2x EBITDA
  • $8M+ EBITDA platforms: ~7.8x EBITDA
  • Demand driver: data-center power demand 31 GW (2025) to 66 GW (2027)

Why is private equity so aggressive on electrical contractors in 2026?

Because the demand is structural. Goldman Sachs Research projects U.S. data-center power demand will more than double from 31 GW in 2025 to 66 GW in 2027 - and that's on top of grid modernization, electrification, and reshored manufacturing, all of which require electricians. When a sponsor underwrites a contractor riding demand set to double in two years, a higher entry multiple is easy to justify. That's why PE now drives roughly 75% of all electrical contractor M&A, and why PE deal volume in the first half of 2025 already exceeded the full prior year. The aggression is amplified by public strategics competing for the same targets - IES Holdings, MYR Group, Quanta Services, and Comfort Systems USA are all consolidating, and MYR's $328M Valley Electric and Comet Electric acquisition in late 2025 shows how hard buyers chase data-center exposure. The full buyer landscape is in my electrical contracting valuation guide.

What kind of electrical contractor wins the bidding?

Scale, management depth, and the right end markets. The pricing spread tells the story: $3M EBITDA shops clear around 6.2x while $8M+ platforms reach about 7.8x - roughly 1.6 turns for size alone. The mean strategic multiple actually cooled to about 7.0x in 2025 from 8.2x in 2024, so buyers pay up for quality, not revenue alone. What moves you to the top is a real management team beneath the owner, diversified and creditworthy customers, a healthy backlog, licensed labor you can retain, and exposure to data centers, healthcare, or industrial work rather than purely cyclical residential construction. The same dynamics are reshaping the adjacent trades, as I cover in who is buying HVAC companies in 2026.

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Frequently Asked Questions

Why is private equity so aggressive on electrical contractors in 2026?
Because the demand behind the trade is structural rather than cyclical. Goldman Sachs Research projects U.S. data-center power demand will more than double from 31 GW in 2025 to 66 GW in 2027, and that sits on top of grid modernization, electrification, and reshored manufacturing - all of which require electricians. When a sponsor underwrites a contractor riding demand set to double, a higher entry multiple is easy to justify, which is why PE now drives roughly 75% of all electrical contractor M&A and why first-half 2025 PE deal volume already exceeded the full prior year. The aggression is amplified by public strategics chasing the same targets: IES Holdings, MYR Group, Quanta Services, and Comfort Systems USA are all consolidating, and MYR's $328M Valley Electric and Comet Electric deal in late 2025 shows how hard buyers will reach for data-center and electrification exposure. For well-run contractors, that competition is exactly what produces strong outcomes.
What kind of electrical contractor wins the bidding?
Scale, management depth, and the right end markets. The pricing spread shows it: $3M EBITDA shops clear around 6.2x while $8M+ platforms reach about 7.8x - roughly 1.6 turns for size alone. The mean strategic multiple cooled to about 7.0x in 2025 from 8.2x in 2024, so buyers are disciplined and pay up for quality rather than revenue alone. What moves you to the top of the range is a genuine management team beneath the owner, diversified and creditworthy customers, a healthy backlog, skilled licensed labor you can retain, and exposure to growth end markets like data centers, healthcare, or industrial work rather than purely cyclical residential construction. A contractor who checks those boxes commands real competitive tension; one that depends entirely on the owner and one or two home-builder accounts will see offers discounted no matter how strong the macro demand looks.