Diversified Industrials Q3 2025

Executive Summary

Company valuations stayed strong in Q3 2025. Across 1,428 deals over the past year (312 in Q3), the median values were 12.38x EBITDA and 1.78x revenue. Despite higher borrowing costs and trade tariffs, the Diversified Industrials sector continued to perform well.

Strategic buyers made up 84.45% of all deals. They focused on reshaping portfolios, finding cost synergies, and improving distribution. Financial buyers represented 11.97%, targeting smaller companies with steady cash flow. Undisclosed buyers accounted for 3.57%, mostly active in the lower mid-market.¹

The largest Q3 transactions were:

• SRS Distribution’s $5.9 billion purchase of Gypsum Management & Supply
• Rosebank Industries’ $2.0 billion acquisition of Electrical Components International
• Triton International’s $1.0 billion purchase of Global Container International

These deals highlight ongoing trends in industrial consolidation, distribution expansion, and logistics optimization.

Although rising costs and economic uncertainty slowed deal volume, buyer confidence remained high. Investors favored companies with recurring maintenance revenue, aftermarket services, and steady demand from infrastructure and retrofit projects.³

Market Dynamics

Deals: 312 in Q3; 1,428 LTM (vs. 1,555 a year ago). Valuations: LTM medians 12.38x EBITDA / 1.78x revenue. Strategic buyers continued to lead as industrial conglomerates and contractors focused on vertical integration and supply-chain control, while financial buyers remained selective given capital-cost constraints. According to Deloitte, Q3 showed an uptick in engineering and construction M&A as backlog visibility improved and industrial production stabilized.

Diversified industrials activity strengthened, driven by demand for manufacturing scale, supply chain integration, and aftermarket service capabilities. The sector saw heightened focus on industrial equipment, components, and logistics assets, reflecting investor appetite for businesses with recurring maintenance revenue, resilient end-market exposure, and operational efficiency advantages.⁴

Deal activity in Diversified Industrials declined modestly year-over-year, with 312 deals in Q3 and 1,428 over the last twelve months (down from 1,555 a year ago). Valuations remained firm, with median 12.38x EBITDA and 1.78x revenue.

Strategic buyers continued to dominate as industrial conglomerates and contractors pursued vertical integration and supply-chain control. Financial buyers stayed selective amid higher capital costs.

Q3 2025 showed a pickup in engineering and construction M&A as backlog visibility improved and industrial production stabilized.³

Activity strengthened in diversified manufacturing, driven by demand for scale, supply-chain integration, and aftermarket service capabilities. Investors favored companies with recurring maintenance revenue, exposure to resilient end markets, and strong operational efficiency. ^{3 4}

Buyer Landscape

Strategic Acquirers: 1,206 of 1,428 LTM (84.45%), focused on scale and synergy capture across materials, construction services, and infrastructure. 

Financial Buyers: 171 of 1,428 (11.97%), targeting industrial services, components, and energy adjacencies. 

Undisclosed Buyers: 51 of 1,428 (3.57%), mainly private operators and regional platforms.¹

Industry Comparison

Diversified Industrials accounted for 10.0% of overall Q3 U.S. M&A volume and 10.3% of LTM activity. Despite a decline in total transactions from 2024 levels, valuation multiples remained stable as buyers sought operational resilience and margin stability. Infrastructure and manufacturing policy tailwinds continue to support deal activity in construction, materials, and specialty services.²

Geographic Expansion

Top U.S. States: Texas (147), California (127), Florida (104), Illinois (56), New York (49). The Sunbelt and Southeast regions led activity on the back of continued population growth, industrial investment, and favorable cost structures. Midwestern states maintained steady volume in manufacturing, machinery, and logistics. 

Notable Transactions

Largest Transactions Closed

Other Strategic Buyer Transactions Closed

Other Financial Buyer Transactions Closed

Emerging Trends

Key trends shaping Diversified Industrials M&A:

1. Platform Consolidation
   Strategic buyers are integrating materials, distribution, and installation networks to capture end-to-end project value.²
2. Manufacturing Strength
   Industrial and component manufacturers are attracting heightened interest amid reshoring trends, automation adoption, and sustained capital investment in production efficiency.²
3. Supply Chain Resilience
   Nearshoring and localization strategies remain central to manufacturing acquisition rationales.^{3 5}
4. Energy Adjacency
   Cross-sector activity linking industrial services to renewables and infrastructure transition projects is accelerating.⁴
5. Operational Synergy Execution
   Buyers are prioritizing integration and efficiency capture to offset higher financing costs.^{3 4}
6. Moderating Sponsor Activity
   Private equity remains measured, favoring bolt-ons and sector-specific platform expansion.¹

Outlook for Next Quarter

Opportunities: Expect continued interest in manufacturing, industrial distribution, and engineering services, particularly those with infrastructure and essential industrial exposure, as buyers seek resilient cash flows and long-term demand visibility. End-markets such as public works and energy transition projects should sustain valuation support.^{2 4} 

Risks: Tariff escalation, input cost volatility, and higher interest rates may compress margins and slow deal pacing. Labor shortages and geopolitical disruptions remain operational concerns.^{3 4} 

Predicted Activity: Strategic acquirers are likely to dominate deal volume via bolt-ons and consolidations, while sponsors focus on specialized verticals with recurring service revenues. Cross-border interest should remain steady in infrastructure and industrial services.^{2 4} 

PCE Transactions

Served as advisor to the trustee of the Herregan ESOP

Served as advisor to Burkhalter Rigging on their growth capital raise

Served as advisor to W.W. Grainger, Inc. on their acquisition of Imperial

Served as advisor to Hisco, Inc. on their acquisition of All-Spec

Served as advisor to Kreuger International as they became 100% ESOP owned

Served as advisor to National Oak Distributors on their capital raise for ESOP purposes

Served as advisor to Zak Incorporated on their acquisition by LAI International and RLJ Equity Partners

Served as advisor to Crane Rental Corporation in their recapitalization by Hammond Kennedy Whitney

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