Power & Energy M&A Update

Executive Summary

M&A activity in the Power & Energy sector began to stabilize in Q2 2026 following the muted start to the year, with transaction volume remaining below historical averages but showing modest sequential improvement. Market dynamics continued to favor scale-driven, strategic transactions, as buyers prioritized assets aligned with generation reliability, grid expansion, and AI-driven power demand. Strategic acquirers remained dominant, while financial sponsors deployed capital selectively into long-duration infrastructure platforms.

“We’re seeing a shift from volume to precision,” said Michael Rosendahl, Managing Director at PCE. “Capital is concentrating into assets that can deliver immediate capacity and reliability as demand accelerates.”

Market Dynamics

Deal volume declined to ~239 LTM transactions in Q2 2026, down from 297 LTM transactions in Q2 2025 and well below the 476 recorded since Q2 2022, signaling a continued weakening in activity following the recent downturn. However, multiples remained resilient, with TEV/EBITDA holding at ~11.5x–12.0x and TEV/Revenue at ~3.9x, reflecting continued competition for assets tied to dispatchable generation, data center power supply, and critical grid infrastructure.

Buyer Landscape

Strategic Acquirers: At 84.9% of total transactions, corporate acquirers dominated deal activity, directing attention toward assets tied to generation reliability, grid infrastructure, and long-term contracted revenue streams. This concentration reflected a sustained strategic imperative among industry participants to secure critical capabilities and reinforce competitive positioning in an evolving energy landscape.¹

Financial Buyers: At 15.1% of deal volume, financial sponsors remained active participants, directing capital toward power generation platforms, midstream gathering systems, and grid component businesses. This pattern underscored sustained institutional demand for durable, cash-generating infrastructure assets well-positioned to benefit from energy transition tailwinds.

Industry Comparison

Power and Utilities M&A activity declined through Q2 2026, despite sustained demand from electrification and AI-driven data center expansion, even as overall deal flow remained below prior peak levels. Activity continued to concentrate around high-quality, large-scale assets, reflecting a sustained shift toward strategic consolidation and platform-driven investments.

This trend is further illustrated by Hubbell Incorporated's $3.0 billion acquisition of NSI Industries, underscoring sustained strategic appetite for scaled electrical infrastructure platforms. The transaction reflects a broader market dynamic in which industrial acquirers pursue bolt-on consolidation to deepen electrification exposure and expand product portfolios ahead of accelerating grid investment.³

Geographic Expansion

Top U.S. States: Deal activity was concentrated in Texas (58 deals), followed by California (16) and New York (11), with Texas maintaining its dominant position driven by natural gas infrastructure, midstream activity, and power generation investment.¹

Cross-Border Trends: Cross-border deal activity in Q2 2026 was highlighted by Parex Resources Inc.'s (Canada) acquisition of Frontera Energy Corporation's Colombian exploration and production assets, closing on June 1, 2026. Parex acquired 100% of Frontera Petroleum International Holdings B.V. for US$500 million in cash. The transaction established Parex as Colombia's largest independent upstream oil and gas producer, reinforcing continued North American strategic interest in Latin American energy assets.

Notable Transactions

Largest Transactions Closed

Other Financial Buyer Transactions Closed

Other Strategic Buyer Transactions Closed

Emerging Trends

Key trends shaping Power and Energy M&A:

1. AI-Driven Power Demand Accelerates Deal Activity
   The expansion of AI and data center infrastructure continues to drive a step-change in electricity demand, pushing buyers toward assets capable of delivering near-term, reliable capacity. M&A activity is increasingly defined by scale, speed, and certainty of supply, with strong competition for assets supporting hyperscaler load growth.³
2. Continued Shift Toward Dispatchable Generation
   Investor focus has further shifted toward “all-of-the-above” generation strategies, with natural gas, nuclear, and hybrid systems gaining prominence alongside renewables. This has driven increased M&A interest in assets that provide firm, dispatchable power and enhance grid reliability.⁴
3. Storage and Grid Infrastructure as Core Investment Themes
   Battery storage and grid infrastructure have become central to transaction activity, as standalone storage assets and transmission-related platforms are increasingly viewed as critical enablers of capacity expansion and system resilience.⁴
4. Subsector Spotlight: Energy Storage & Power Reliability
   Battery storage has cemented its role as a foundational infrastructure category, with M& momentum building around both standalone and hybrid configurations. As solar generation approaches saturation in major markets, storage assets are proving essential for stabilizing supply, managing load shifts, and addressing near-term capacity gaps — sustaining strong acquisition interest in large-scale platforms.⁶
5. Subsector Spotlight: Gas Supply & LNG Networks
   Natural gas and LNG infrastructure remains a focal point for buyers, driven by the demand for reliable, dispatchable power. Strategic and financial investors alike are pursuing midstream consolidation and gas-fired generation platforms to ensure consistent fuel supply and accommodate rising energy demand. As power markets tighten and the need for firm baseload capacity intensifies, natural gas assets — spanning pipelines, compression facilities, and LNG terminals — are increasingly viewed as essential components of a resilient energy system. Buyers are prioritizing scale and geographic diversification, seeking platforms that can support long-term contracted cash flows while also providing flexibility to serve both domestic and export markets.⁷

Outlook for Next Quarter

Opportunities: Data center growth, electrification, and all-of-the-above generation strategies are expected to drive deal activity in dispatchable generation, grid infrastructure, and firm power assets. Natural gas — as a reliable bridge fuel — should see continued M&A interest in gas-fired generation and midstream platforms.

Risks: Persistent structural constraints — including interconnection queue backlogs, extended equipment lead times, and ongoing policy recalibration around generation incentives — represent meaningful headwinds that could delay project timelines and compress deal returns.

Predicted Activity: Power and utilities M&A is anticipated to accelerate through the second half of 2026, with dealmakers continuing to concentrate capital in assets offering near-term capacity and predictable cash flows. Natural gas assets — including gas-fired generation, midstream infrastructure, and LNG-linked platforms — are expected to attract heightened deal flow as buyers prioritize dispatchable, firm-power solutions to backstop rising electricity demand. Hyperscalers are expected to remain active acquirers of operating power generation assets, alongside increased funding of behind-the-meter resources to address AI-driven load growth.⁸

PCE Transactions

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

Served as advisor to E Energy Adams

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

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