Selling an Architecture or Engineering Firm: Inside the U.S. M&A Market

Architecture and engineering firms share a common profile that makes them unusually interesting to acquirers: they are people businesses with sticky client relationships, recurring or repeat work, real technical barriers to entry, and — for engineering in particular — a wave of public-infrastructure demand behind them. They are also overwhelmingly small, privately held, and owned by founders and principals now approaching a transition. That combination is exactly what draws capital. Below, we lay out the market as it actually stands: its scale, its momentum, who is buying, and what firms are worth.

A Large and Essential Industry

Start with the size of the prize. According to the American Council of Engineering Companies (ACEC), the U.S. engineering and design services industry generated roughly $459 billion in revenue in 2024, up 5.3% on the prior year, with growth expected to moderate to about 2.3% in 2025. The same ACEC assessment counts nearly 1.7 million people employed directly in the industry, supporting some 5.7 million jobs across the wider economy, and contributing about $685 billion to U.S. GDP.

Architecture is a substantial slice in its own right. IBISWorld pegs the U.S. architectural services market at about $66.4 billion in 2025, having grown at roughly a 2.1% annual rate over the prior five years. Looking forward, Grand View Research projects U.S. engineering services revenue to keep compounding at around 6% a year through 2030. (These figures come from different providers using different scope definitions — ACEC's number folds engineering, architecture, and environmental services together, while the narrower research-firm estimates vary — so they should be read as directional rather than strictly additive.)

Fragmented by Nature — and Primed for Consolidation

What makes A&E so attractive to consolidators is not just its size but its shape. This is an industry of small firms. In Zweig Group's 2025 valuation dataset, the median A&E firm has about 45 full-time employees and $7.7 million of net service revenue. Morrissey Goodale, which tracks A&E dealmaking, reports that the median seller in recent transactions had revenue of just $4.3 million, while the median acquirer had revenue of $147.9 million — a picture of larger platforms methodically rolling up much smaller firms.

Layer on the demographics. A large share of these firms are owned by founders and senior principals nearing retirement, and the traditional exit — an internal sale to the next generation of employees — is harder to fund than it used to be. That is precisely the condition that turns a fragmented industry into a decade-long consolidation wave: a deep supply of sellers meeting a well-capitalized, motivated set of buyers. Firms in the roughly $2 million to $200 million revenue band — the lower middle market — sit at the center of it.

Dealmaking Is Running Near Record Levels

The activity backs this up. In the first half of 2024 alone, Morrissey Goodale tracked 243 A&E transactions in the United States — the second-most active start to any year on record. Total revenue acquired in those deals rose 9% to about $4.4 billion, and the number of transactions above $100 million climbed to 11, up from 8 a year earlier. Fifteen of the ENR Top 500 Design Firms — the industry's largest — were sold or recapitalized in that same six-month window.

For an owner, the signal in that data is straightforward: buyers are numerous, active, and paying up for the right firms. A well-run A&E business coming to market today is not searching for a single interested party; it is entering a competitive field of strategic acquirers, employee-ownership platforms, and private-equity-backed consolidators who all need to keep growing.

Private Equity Has Moved In — and It Is Reshaping the Market

The single most important structural change in A&E over the last few years is the arrival of institutional capital. Morrissey Goodale's buyer breakdown makes the shift concrete: in the first half of 2024, private-equity and PE-backed buyers accounted for 42% of U.S. A&E acquisitions, up from 35% in the same period of 2023. Employee-owned buyers still led at 51%, with publicly traded acquirers making up the remaining 7% — but the trajectory is unmistakable, and much of the employee-ownership activity is itself now financed with outside capital.

---

---

The penetration is deepest among the largest firms. Rusk O'Brien Gido + Partners, in its A/E Business Valuation and M&A Transaction Study, estimates that roughly 20% of the ENR Top 250 design firms and about 12% of the ENR Top 500 now have private-equity investment. Sponsors typically build a "platform" — a strong regional or specialty firm — and then acquire smaller firms around it to add geographies, disciplines, and talent. For a founder, that dynamic cuts two ways: it creates a motivated, well-funded buyer that can pay competitive multiples, but it also means understanding what a financial sponsor actually values, and how a platform sale differs from selling to a strategic peer or transitioning to employees.

What A&E Firms Are Actually Worth

Now the question every owner asks first: the multiple. Here the data rewards precision, because the "right" number depends heavily on who is buying and why — and conflating the two most common benchmarks is where owners most often go wrong.

The first benchmark is appraised fair-market value, the figure used for internal ownership transfers, ESOPs, and stock-based transitions between principals. In Zweig Group's 2025 Valuation Report of AEC Firms, the average firm was valued at 4.28 times EBITDA — up slightly from 4.23 the year before. That number governs a great deal of the internal-transition activity in the industry, but it is not what an outside buyer pays.

The second benchmark is what firms fetch in actual, arm's-length M&A transactions, and it runs meaningfully higher. Rusk O'Brien Gido + Partners' transaction study — built on 257 completed deals — reports a median enterprise-value-to-EBITDA multiple of about 5.3 times across all A&E firms, and roughly 5.5 times for engineering firms specifically, with upper-quartile transactions reaching about 6.8 times and higher. Since the Infrastructure Investment and Jobs Act passed in late 2021, the study notes, acquirers have grown more comfortable paying up — post-2022 deals carry a modest premium — as infrastructure funding gives them better visibility into future revenue.

---

---

The practical takeaway is that selling externally into a competitive process has historically produced a materially higher value than an internal transfer — and that engineering firms, buoyed by infrastructure demand, tend to command a premium over the broader average. Where a specific firm lands within these ranges is not luck; it is a function of the value drivers below.

What Drives an A&E Firm's Multiple

Two firms of identical size can trade several turns of EBITDA apart. What separates them is the predictability and transferability of their earnings. The factors buyers reward most in A&E:

• Backlog and forward visibility. Signed, contracted work is the single clearest evidence of next year's earnings. Zweig Group tracks firm value explicitly against backlog for exactly this reason — a healthy, diversified backlog de-risks the deal in a buyer's eyes.
• Specialized technical capability. Buyers pay premiums for scarce, in-demand disciplines and credentials they cannot easily hire or build — capabilities that open doors to clients and geographies they want.
• End-market mix. Exposure to funded, durable demand — public infrastructure, water, transportation, energy — is valued more highly than exposure to volatile private-development cycles.
• Recurring and repeat client relationships. Master-service agreements, on-call contracts, and long-standing institutional clients reduce revenue risk.
• Leadership depth beyond the founder. A firm whose relationships and decisions run entirely through one or two principals carries key-person risk that buyers discount. A genuine second tier of leadership is worth real money.
• Consistent profitability. Firms sustaining healthy margins command higher multiples; those running thin are valued more cautiously, regardless of headline revenue.

The Tailwinds — and the Near-Term Reality

The medium-term backdrop for engineering is genuinely strong. The Infrastructure Investment and Jobs Act, signed in November 2021, continues to push federal dollars into transportation, water, and energy projects — the work that flows directly to engineering firms — and, as the transaction data shows, it has made acquirers more willing to underwrite growth and pay higher multiples.

That said, a credible read of the market has to acknowledge the near-term softness on the architecture side. The AIA/Deltek Architecture Billings Index — a leading indicator that tends to foreshadow nonresidential construction spending by about 9 to 12 months — read 44.5 in May 2026, below the 50 mark that separates growth from contraction, reflecting a stretch of softer billings at architecture firms amid economic uncertainty. In other words, the long-term consolidation story and the short-term construction cycle are pointing in different directions right now: private-development-exposed architecture demand has cooled, even as publicly funded engineering demand and M&A appetite remain robust. For owners, that divergence is not a reason to wait or rush on reflex — it is a reason to understand precisely where your firm sits within it.

What This Means If You Own an A&E Firm

Put the pieces together and a clear picture emerges. You operate in a large, essential industry that is consolidating at a near-record pace. Founder- and principal-owned firms in the lower middle market — the roughly $2 million to $200 million revenue band — are the sellers feeding that wave, and it is precisely the segment Trident works in every day. You have more categories of buyer than ever — strategic peers, employee-ownership platforms, and a growing field of private-equity-backed consolidators, most of them far larger than the firms they acquire — and the best of them are paying multiples that sit well above internal-transfer value. But those buyers are discerning, and the difference between a median outcome and an upper-quartile one comes down to preparation and process.

The owners who realize the top of these ranges tend to do the same things: they clean up and organize several years of financials before going to market; they build genuine leadership depth so the firm is not synonymous with the founder; they document their backlog and pipeline; they can articulate exactly which disciplines and end markets make them valuable to a specific buyer; and — most decisively — they run a competitive process rather than negotiating with a single acquirer who knocked on the door. In a market this active, competitive tension is what moves a firm from the median multiple toward the upper quartile.

Conclusion

The U.S. architecture and engineering market is in the middle of a generational transition. Capital has discovered it, valuations for well-run firms are compelling, and the buyer universe has never been broader. But it is also a market where the spread between a good outcome and a great one is wide, and where the difference is made long before a term sheet appears. Understanding the numbers — the multiples, the buyers, the drivers, and the cycle — is the first step. Acting on them with the right preparation and a genuinely competitive process is what turns a strong market into a strong result.

At Trident, this is the work we do — senior-led, and focused on the lower middle market: helping A&E owners understand what their firm is truly worth to the market, prepare it to command the top of its range, and run a disciplined, competitive process that discovers the best buyer and the best price.