The new infrastructure bill

Aug 01, 2021

How will the new infrastructure bill impact M&A activity in the AEC industry?

The need for investment in infrastructure in America is long overdue, and that has been documented more heavily in recent months. The details of the infrastructure bill put forth by President Joe Biden are still up in the air, but a deal is expected to be finalized in a matter of days in spite of the slow-moving active negotiations happening in Congress, according to CNBC. As much as the positioning and lobbying of Congress can give us all a slight migraine, the details of this bill when it is inevitably pushed through will be of grave importance as AEC firm leaders are making critical decisions about their firm’s futures on a daily basis.

According to The American Jobs Plan Fact Sheet, “The United States of America is the wealthiest country in the world, yet we rank 13th when it comes to the overall quality of our infrastructure. After decades of disinvestment, our roads, bridges, and water systems are crumbling. Our electric grid is vulnerable to catastrophic outages. Too many lack access to affordable, high-speed internet and to quality housing. The past year has led to job losses and threatened economic security, eroding more than 30 years of progress in women’s labor force participation. It has unmasked the fragility of our caregiving infrastructure.”

This deal will have monumental impacts on architects, engineers, and environmental consultants for the next 10 years and beyond. As noted in the Fact Sheet above (and further at, it will create an influx of billions of dollars into the U.S. economy, much of which will go toward areas that AEC firms serve – with investments into roads, wind/solar energy, and multi- and single-family housing, to name just a few examples. AEC firms and firm leaders that position themselves to take advantage of this opportunity will see significant, and perhaps unprecedented, growth over the next decade. Many AEC firms will have no choice but to turn to mergers and acquisitions to find the people they need to meet the increased demand and continue growing.

Here are a few ways that M&A activity in the AEC industry will be impacted by the new infrastructure bill:

  1. More opportunities. More dollars equals more projects, more projects equals growth for AEC firms, and that growth will lead to an abundance of M&A activity, the likes of which we have not seen before in this industry. This bill, along with the other reasons I outlined in my last article for The Zweig Letter, “Why You Should Be Open to M&A,” will cause more AEC firms than ever to be looking to acquire another firm or to be acquired themselves. There may be more “swings at the plate” when looking for M&A opportunities going forward for this reason, and this could give a firm that goes about the process in a diligent way more options when they get to the negotiating table.
  2. More competition. For simplicity's sake, let’s assume you are a buyer in the M&A market for a moment. In addition to the increased opportunities you may find for acquisition, you may also find that a growing number of companies are looking for targets in similar geographies and market sectors as you. This makes it all the more important that, if you do decide that M&A is the best growth strategy for you, you make it a top priority and “come correct” in developing your strategy as well as with any promising leads that you come across. The opportunities will be there – what are you doing to differentiate yourself from the competitors in the market who are looking for the same things you are?
  3. Out-of-industry buyers. Private equity groups, investment banks, family offices, and tech companies are just a few of the examples of non-AEC groups that will become more interested in making investments in this industry. These groups are typically more sophisticated when it comes to M&A, but less experienced when it comes to AEC firms specifically. Their lack of experience in AEC can lead to confusion during negotiations if they do not have an advisor who understands this industry. They may also be willing to pay a higher price tag at times, but that will often come to the detriment of the selling firm’s staff who aren’t shareholders.
  4. Higher valuations. The increased demand for this industry along with the increased interest from out-of-industry buyers should bring valuations higher. Although the supply should also increase, as outlined in No. 1 above, the increased activity will justify higher projections and multiples which will inevitably lead to higher closing prices for the deals that do get across the finish line.

John Bray, CM&AA is an advisor with Zweig Group’s M&A and executive search teams. Contact him at

Whether you’re on the buy- or sell-side of a deal, Zweig Group’s full-scale M&A advisory team can help you find and evaluate candidates and then structure the transaction – managing the complicated process from conception to the closing table. Learn more about Zweig Group’s M&A services here.

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About Zweig Group

Zweig Group, three times on the Inc. 500/5000 list, is the industry leader and premiere authority in AEC firm management and marketing, the go-to source for data and research, and the leading provider of customized learning and training. Zweig Group exists to help AEC firms succeed in a complicated and challenging marketplace through services that include: Mergers & Acquisitions, Strategic Planning, Valuation, Executive Search, Board of Director Services, Ownership Transition, Marketing & Branding, and Business Development Training. The firm has offices in Dallas and Fayetteville, Arkansas.