“Hot” industries in M&A –and a potential Trump factor in U.S. business sales

While industry appeal can be short-lived and misread, a profitable company in a tried-and-true sector will always be in style.

By Gary Papay, M&AMI Managing Partner, IBG Business

In a typical week, each of the 15 M&A professionals at IBG Business receives 25 to 50 emails from private equity groups and other financial buyers looking to acquire businesses. While their acquisition criteria vary from buyer to buyer, inquiries usually include at least two predictable elements: (1) their desired EBITDA threshold and (2) their targeted industries.

The steady flow of inquiries offers us a rolling survey of the types of companies buyers want and, with regard to the second criterion above, can provide useful clues as to which industries are particularly attractive, at least in the short term.

In this article, we will take a look at a few industries that appear to be in relatively high demand at this time. But before we move into our list of “hot” industries, I want to offer two observations intended to put that list in perspective.

First, an industry may genuinely be in high demand because of current and anticipated market conditions. Or, its apparent appeal might be something of a mirage, if a lot of buyers for that industry are simultaneously in the market mainly because they have surplus cash on hand and need to put it to use to generate returns for their investors.

Second, business value is not a zero-sum game – i.e., the values of businesses in unrelated sectors rise and fall independently of each other. Just because one industry makes the “hot” list does not mean that another industry must experience a corresponding decline in its market value. It absolutely should not deter owners of profitable companies in any industry from executing their well-conceived plans to sell.

High-Demand Sectors

In his March 2025 client letter, Reece Adnams, CEO of our international affiliate Eaton Square, offered his findings from an informal survey of private equity groups.

First, the numbers:

•       Price range (or “enterprise value”): $10 million-$200 million
•       Investment range: $10 million-$100 million
•       Ownership: open to control positions 51% to 100% or significant minority positions 30% to 50%

Reece’s findings closely align with what we at IBG are seeing, with the exceptions that (a) among the buyers with which we interact, we see relatively little interest in purchasing a minority stake, and (b) private equity groups that already own businesses in a given industry are more likely to look at smaller businesses in that industry.

Second, he reports a buyer trend that is a “step back from investing in technology (except cyber) and greater interest in [profitable] ‘old school’ businesses … like distribution and onshore advanced manufacturing.”

His examples of “hot demand” industries include:

•       Electrical infrastructure sector maintenance suppliers involved in the transformation of the electricity grid;
•       Infrastructure maintenance companies with long-term contracts for repair and maintenance of large infrastructure assets, such as highways, bridges, dams, other water infrastructure, oil and gas, electricity;
•       Field services companies (e.g. HVAC, fire and safety systems, elevators, and commercial landscaping and maintenance) with long-term contracts and stable customers;
•       Pharmaceutical distribution and supply chain companies engaged in moving and storing pharmaceuticals and ancillary products, serving customers that have sophisticated storage and transportation requirements;
•       Food packing and distribution companies, with a focus on processing, packing, storing, refrigeration, and distribution; and
•       Professional services firms that serve other companies in such areas as IT (including cybersecurity) and program management.         

We generally concur with this list and, based on recent inquiries and our listings and closed deals, would add:

•       Precision metals manufacturing;
•       Environmental remediation companies;
•       Oil/gas/energy;
•       Logistics/trucking firms; and
•       Civil engineering.

“Private equity’s interest in these areas,” Reece continued, “reflects a strategic focus on industries with stable, long-term growth potential and essential services that protect downside risk. Businesses operating within these sectors that meet the investment criteria are well-positioned for growth and expansion with PE funding.”

This, too, is consistent with our recent experiences with private equity buyers. From a risk perspective, private equity groups have historically looked with favor on steady, tried-and-true industries that are going to be there no matter what, and whose goods and services will always be in demand.

As my IBG colleague Troy Stapley (Arizona) noted in his February 2025 article, investors are increasingly looking at companies that “aren’t in the sexy, high-tech, high-growth industries. Today,[financial buyers]are more interested than before in steady, blue-collar, easier-to-understand types of companies.”

A Trump Factor in Business Value?

In another Reece Adnams article, “Observations on Trump’s Impact on Global M&A,” he introduces a business-value effect that transcends industry considerations.

He predicts that the trends that are stemming from the Trump administration’s economic and trade policies will impact M&A strategy in the U.S., “forcing companies to rethink domestic consolidation, foreign expansion, and cross-border transactions.”

“At Eaton Square, we are seeing U.S. corporations and PE prioritizing acquisitions at home over expansion abroad. The Trump administration’s policies are explicitly favoring companies that invest within U.S. borders … and this will take capital away from overseas investments.”

If that assessment proves to be prophetic, U.S. business owners might see more interest from foreign buyers. Even a small spike in interested buyers, whether foreign or domestic, would increase the competition for, and market value of, American businesses.

At IBG, for certain types of listings we have always marketed internationally, and that is starting to come into the picture even more today. As examples, we recently sold a machine distributor to a German buyer and currently have a purchase proposal for a manufacturer from an Italian firm, and I have a current listing for a $40 million trucking company for which international buyers may very well fit the “best-fit buyer” profile.

IBG: An M&A Firm for All Major Sectors

Notwithstanding how “hot” an industry is perceived to be at a given moment, the more important fact is that, for profitable companies in any sector, there are financial buyers that are flush with cash and seek good businesses that will maximize the return for their investors.

IBG Business’s 1,200-plus deals, with a closing rate more than three times the national average, cover the spectrum of mid-market industries, including:

•       Aviation
•       Business services
•       Construction
•       Food products
•       Health and medical
•       Manufacturing
•       Oil/gas/energy
•       Retail
•       Technology
•       Transportation and trucking
•       Wholesale distribution

We know these industries, and we know the buyers who do business there. To explore the demand and market value for your private company, contact an IBG Business M&A professional near you.