While high financing costs and lingering recession fears have yet to stymie contractors’ strong backlog levels, those headwinds have slowed the mergers and acquisitions market for construction and engineering firms, said Tristan Tahmaseb, vice president at ButcherJoseph & Co., a St. Louis-based boutique investment banking firm.
M&A activity surged after the pandemic, especially due to public funding from the $1.2 trillion Infrastructure Investment and Jobs Act, the $52 billion CHIPS Act and the $485 billion Inflation Reduction Act. For example, IIJA juiced M&A deals in the construction sector to surge from an average of about 100 deals per quarter going back to 2017 to double that pace after its passage, according to Tahmasab.
