Outlook 2025: Energy, Power & Infrastructure

As we head into 2025, we're seeing many reasons for sustained activity in the M&A and private capital markets. Over the past year, there has been steady improvement in the rate environment, the GDP outlook, consumer spending and financial health, and corporate earnings. 

Against this backdrop, we believe 2025 will see ongoing growth across several areas of energy, power, and infrastructure, and we're excited for the opportunities to come. See our perspectives on the overall M&A and private capital markets.

Energy, Power & Infrastructure: Powerful Megatrends 

The energy, power, and infrastructure industry is supported by several global trends, including a rapid increase in electrification; the ongoing energy transition; growing demand for connectivity, sustainability, and digitization; and aging infrastructure in need of upkeep and upgrades. 

With these long-term themes in place and economic conditions steadily improving, M&A interest remains strong for innovative companies throughout the industry. We're seeing healthy activity across multiple categories—including critical infrastructure, electric infrastructure, water and transportation infrastructure, engineering, and energy management, among others—and expect continued momentum heading into 2025 and beyond. 

Below, we share the trends behind this momentum, key categories particularly well positioned for success, and recent clients that exemplify the industry's investment potential.

Critical Infrastructure: Visibility, Defensibility, and Stability

In any economic environment, many investors prioritize opportunities to put capital to work in recession-resilient spaces and business models. Companies serving essential infrastructure end markets often feature several traits that resonate with these investors, including earnings visibility, defensibility, and stable long-term demand.

Our senior professionals are seeing more interest across investor classes around critical infrastructure and outsourced services, noting significant interest in companies serving utilities, renewables, telecom, environmental, roadway, municipal water, and water and transportation infrastructure end markets.

For example, a broad array of products, services, and technologies are critical to the high-growth utility, renewable energy, data center, and commercial and industrial segments, driving steady demand and M&A through the electric infrastructure value chain.

"Due to rapid growth in electrification, the transition to renewable energy, and a greater desire for connectivity, it's become more critical to enhance grid resiliency, capacity, and durability," explains Matt White, a group head and managing director. "Essential grid improvements will drive sustained investment in electric infrastructure and a strong need for the companies that support the ecosystem."

Spotlighting this opportunity are a diverse set of Harris Williams engagements, featuring differentiated companies serving electric infrastructure that have captured investor attention. These include Maxima Power Group, Insulation Technology Group, GridTek Utility Services, Trachte, Voltyx, Systems Control, MGM Transformer, Saber Power Services, and DMC Power.

Energy Management: Substantial Upside

All the factors driving evolving and expanding energy usage—data center growth, increases in electrification, and many others—are also generating strong demand for a range of outsourced providers specializing in energy management services. This includes those that create, implement, and manage energy efficiency initiatives.

Due to unpredictable energy costs and rising power demand, these energy efficiency programs are increasingly important. And thanks to continuous energy efficiency improvements and technology advancements, the segment holds many appealing investment opportunities. Our client CLEAResult, for instance, works with the country's largest utilities on their energy efficiency program design, administration, and assessment. Harris Williams also advised Morgan Stanley Capital Partners on their acquisition of Resource Innovations, a leading tech-enabled services company focused on energy efficiency and sustainability.

CLEAResult and Resource Innovations are great examples of successful platforms helping to change the way energy is used, but there are many ways to participate in the space. Several different energy management business models are supporting the energy transition and benefiting from market tailwinds around energy consumption, regulation, and spending.

"Whether providing advisory services, load management, installation of energy efficiency retrofits and upgrades, or other assistance, leading energy management companies have substantial upside in the years to come," says Drew Spitzer, a group head and managing director. "We're excited to see the energy transition drive prolonged growth for energy efficiency companies and other businesses across the energy management ecosystem."

Engineering: Powerful Tailwinds, Continued Momentum

In recent years, the fragmented and recession-resilient engineering sector has experienced accelerating investor interest, particularly among the private equity community. Powerful trends supporting the energy, power, and infrastructure industry as a whole—like stable funding dynamics and macroeconomic tailwinds supporting further spending—are also propelling private equity participation and a valuation uplift across the sector.

For example, we worked with Consor, a leading provider of civil infrastructure planning, engineering design, structural assessment, program management, and consulting services to public and private sector clients across transportation and water markets. And our client GeoStabilization International, for its part, offers geohazard mitigation solutions and roadway safety services. Such businesses that provide essential services to the function and safety of infrastructure and communities remain incredibly attractive to investors.

Water & Wastewater: Non-Discretionary, Long-Term Demand

Another important area of opportunity is the water and wastewater space. Because of prolonged underinvestment in water and wastewater infrastructure, municipalities and utilities are repairing, replacing, and improving a swath of outdated, deteriorating assets.

This essential upkeep is driving non-discretionary, long-term demand for critical services, products, and technology companies specializing in water-related assets. Meanwhile, municipalities and utilities are outsourcing more non-core services, including water and wastewater services. In addition, regulatory regimes and compliance standards are becoming more stringent, resulting in stricter enforcement of complicated water and wastewater regulations.

These trends are increasing investor interest in a diverse range of businesses across the water and wastewater value chain, as evidenced by a variety of Harris Williams engagements including USA Water, WRM Companies, Apex Companies, Ardurra, and USG Water.

Looking Forward

Due to a variety of powerful worldwide dynamics—including the energy transition, expanding infrastructure spending, and ever-increasing demand for electricity—services, products, and technology throughout the energy, power, and infrastructure industry are experiencing higher demand. That demand is driving a wave of investment in innovative businesses throughout the space. 

"Going forward, we expect the broad appeal of the industry to intensify, driving long-term M&A activity across energy, power, and infrastructure," says White. "The magnitude of the industry's trends and the long-term stability and growth they foster will continue to attract a variety of investor types, including private equity groups, strategic buyers, and infrastructure funds."

Harris Williams has played a meaningful role in the industry's surging M&A activity. In 2025, we look forward to partnering with energy, power, and infrastructure investors and company leaders worldwide to help them navigate the M&A and private capital markets and unlock value in their businesses.

Learn more about the Harris Williams Energy, Power & Infrastructure Group.