Industry Trends
Largest Transactions Closed
- Target
- Buyer
- Value($mm)
Advised Western Milling in their sale to the Western Milling ESOP Trust
Executive Summary
M&A activity in the Power & Energy sector remained subdued in Q4 2025, with 236 transactions closed on an LTM basis, down from 335 in the prior year and well below the cycle peak of 509 deals in Q4 2021. Strategic buyers continued to dominate activity, accounting for 81% of transactions, while financial buyers represented 19%, reflecting an ongoing focus on consolidation and operational control. Despite lower volume, valuations remained firm, with median TEV/EBITDA at 10.64x and TEV/Revenue at 3.64x, up from 10.59x and 3.42x a year ago, underscoring continued competition for high-quality, contracted energy assets.1
“Power and utilities M&A continues to center on assets that can reliably support accelerating load growth, particularly from data centers and electrification,” said Michael Rosendahl, Managing Director at PCE. “Even as overall volume remains constrained, buyers are concentrating capital into fewer, strategically critical platforms tied to grid reliability and long-duration cash flows.”
Market Dynamics
Deal activity declined meaningfully year over year, extending a multi-year normalization trend from the 2021 peak. Elevated financing costs, regulatory complexity, and interconnection and equipment delays continued to temper transaction volume, while resilient valuation multiples reflect acquirer emphasis on assets with contracted cash flows, regulated exposure, and strategic relevance to grid reliability and energy transition.1
Buyer Landscape
Strategic Acquirers: Strategic buyers led the market with 81% of transactions, targeting assets tied to generation reliability, grid infrastructure, and long-term contracted revenue to secure critical capabilities.1
Financial Buyers: Financial buyers accounted for 19% of deals, remaining focused on stable cash-flowing assets, platform build-outs, and selective utility and infrastructure opportunities.1
Industry Comparison
Power and Utilities dealmaking in Q4 2025 was shaped less by broad volume and more by strategic consolidation tied to infrastructure demand, with buyers prioritizing scale and reliability to meet accelerating load growth. This positioned the sector as a relative bright spot within energy given the concentration of capital into fewer, larger utility and IPP transactions. 5
Geographic Expansion
Top U.S. States: Deal activity was concentrated in Texas (52 deals), followed by California (18) and New York (12), reflecting continued investment across power generation, grid modernization, and energy transition initiatives.1
Cross-Border Trends: While the majority of transactions remained domestic, international capital continued to play a selective role, highlighted by the $6.3B acquisition of ALLETE, Inc. by Canada Pension Plan Investment Board, underscoring ongoing foreign interest in U.S. regulated and contracted power assets.1
Notable Transactions
Largest Transactions Closed
| Target | Buyer | Value ($mm) |
| ALLETE, Inc. | Canada Pension Plan Investment Board; Global Infrastructure Management, LLC | $6,932.00 |
| Guernsey Power Station LLC | Talen Generation, LLC | $2,330.00 |
| Natural Gas Assets of Lotus Infrastructure Partners | Vistra Operations Company LLC | $1,900.00 |
| Epic Crude Holdings, LP - Non-Operated Interest | Plains All American Pipeline, L.P.; Plains GP Holdings, L.P. | $1,793.00 |
| Epic Crude Holdings, LP - Operated Interest | Plains All American Pipeline, L.P.; Plains GP Holdings, L.P. | $1,487.00 |
| Moxie Freedom, LLC | Talen Generation, LLC | $1,456.00 |
| TPC Engineering Holdings, LLC | Amphenol Corporation | $1,000.00 |
| Bahia Natural Gas Liquids Pipeline | Exxon Mobil Corporation | $650.00 |
| Basler Electric Company, LLC | Littelfuse, Inc. | $353.00 |
| Unit Drilling Company | Cactus Drilling Company, LLC | $120.00 |
Other Financial Buyer Transactions Closed
| Target | Buyer | Value ($mm) |
| Freeport Power Limited | Fengate Capital Management Ltd. | n/a |
| Linden Cogen Holdings, LLC | EGCO Linden II, LLC | n/a |
| Rowan Energy, Inc. | Gladstone Investment Corporation ; Gladstone Management Corporation; Xyresic Holdings, LLC | n/a |
| Central Midstream Partners, LLC | Tailwater Capital LLC | n/a |
| American PowerNet Management, L.P. | Axpo U.S. LLC | n/a |
Other Strategic Buyer Transactions Closed
| Target | Buyer | Value ($mm) |
| Hawaii Renewables LLC | Alohi Renewable Energy, LLC | $100.00 |
| American Well Services, LLC | Ranger Energy Services, Inc. | $92.00 |
| Maine Natural Gas Corporation | Unitil Corporation | $86.00 |
| EVRedi Inc. | Nayax Ltd. | $26.00 |
| Premium Oilfield Services, LLC | Archer Limited | $20.00 |
Source S&P Capital IQ as of 1/5/2026 and PCE Proprietary Data
Emerging Trends
Key trends shaping Power and Energy M&A:
- Load Growth Driven Consolidation
Rising electrification and AI driven demand are pushing buyers toward dispatchable generation and high availability infrastructure near major load centers.5 - Grid Upgrade Investment Cycle
Utilities are planning a multi-year step up in grid upgrades to expand transmission, storage, and reliability capacity, reinforcing demand for grid related services and infrastructure platforms.3 - Contracted Renewables and Infrastructure
Capital Sponsors continue to favor long duration contracted cash flows, with infrastructure capital targeting renewable platforms backed by long term PPAs and embedded growth pipelines.2 - Tariff and Cost Risk Underwriting
Deal underwriting is increasingly incorporating tariff and imported component cost risk that can delay projects or shift investment toward domestically sourced and conventional reliability assets.5 - Subsector Spotlight: Regulated Utilities
Regulated utility consolidation is reemerging as companies seek scale, balance sheet strength, and operating resilience amid rising reliability requirements.5 - Data Center Adjacent Firm Power
Firm, dispatchable power and grid interface assets are becoming focal points as data center electricity demand projections rise sharply and developers seek dependable supply.4
Outlook for Next Quarter
Opportunities: Continued data center expansion and electrification should sustain strategic demand for dispatchable generation, transmission buildouts, and reliability focused infrastructure.5
Risks: Overestimation of load forecasts and execution constraints around interconnection and equipment availability can pressure timelines and returns.4
Predicted Activity: Expect ongoing concentration of value into larger utility and IPP deals, portfolio rationalization, and continued infrastructure fund deployment into long duration yield assets.5
PCE Transactions
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