Industrial & Environmental Services Market Update – August 2025

Industrial & Environmental Services Market Sees Heightened Demand for Water Remediation, M&A Rises Filling Capability Gaps

The Industrial & Environmental Services market has seen heightened demand for remediation services following new and impending state-level regulatory updates for more strict and regular testing, documentation, and protocols. Potable water management and Legionella treatment services have been of particular focus, driving growth for water treatment providers that have become critical compliance and risk mitigation partners to various end markets. As regulatory pressures mount, hospitals, in particular, have sought full-service vendors who can provide testing, monitoring, system retrofits, and emergency response services under a single umbrella. These tailwinds have fueled merger and acquisition (M&A) activity as strategic buyers and private equity (PE) firms look to acquire operators with established relationships and proven water safety programs. Buyers have prioritized firms that offer recurring testing services and emergency response capabilities, viewing these players as essential for infrastructure-parallel projects. Capstone anticipates these roll-up strategies to expand recurring revenue streams for operators in the sector while raising the barrier to entry for unlicensed or less specialized competitors.

Over the past 12 to 18 months, M&A activity in the Environmental Services sector has seen transactions clearing at aggressive EBITDA multiples, raising valuation expectations among potential sellers. The highest multiples are typically reserved for businesses with strong regulatory permitting and well-developed infrastructure—attributes that signal long-term value, operational scalability, and reduced execution risk, making them especially attractive to strategic acquirers.

Timm KuechleSenior Director, Capstone Partners

Strategics and Sponsors Fuel Broad-Based Surge in Industrial & Environmental Services Market M&A

M&A activity in the Industrial & Environmental Services market has surged year-over-year (YOY) across all PE and strategic buyer categories. While other Industrials industry sectors have experienced cooling M&A activity, the Industrial & Environmental Services space has attracted growing investment interest amid regulatory tailwinds, heightened infrastructure spending, and rising demand for critical services like nondestructive testing (NDT), inspection, remediation, and liquid waste management. Total sector deal volume has risen 28.1% YOY to 89 transactions announced or completed to date. Deal volume among public players saw the largest rise (66.7%) of any buyer type—up by six deals—as public strategics have sought to fill capability gaps via bolt-on deals.  Infrastructure-focused services businesses have targeted water, waste, and asset integrity services to capitalize on long-term growth tailwinds from sustainability mandates and federal funding initiatives. One of the most notable strategic entries in the space has been Acuren’s (NYSE:TIC) announced acquisition of NV5 Global (Nasdaq:NVEE) for $1.8 billion, equivalent to 1.9x EV/Revenue and 10.9x EV/EBITDA (May 2025). Acuren has long dominated the Industrial Inspection market but has recently sought to expand or diversify revenues in the high-growth global Testing, Inspection, Certification & Compliance (TICC) and Engineering Services markets—areas where NV5 has operated. The deal will provide Acuren with direct exposure to bridges, rail, and highway projects, a natural extension of its traditional Oil & Gas and Power end market operations. This acquisition reflects a broader trend of strategics repositioning portfolios around resilient, compliance-driven assets that leverage long-term macroeconomic growth tailwinds.

Private strategic buyers have ramped up M&A activity through year-to-date (YTD) 2025, finding high-margin businesses and fragmented regional markets to encourage consolidation in the space and achieve synergies. Private strategics have accounted for 25 sector deals through YTD 2025 compared to 16 in YTD 2024, marking a reversal of the previously softening deal environment. Concurrently, PE buyers have aggressively targeted platform formations and add-ons to capitalize on recurring revenue streams and high regulatory barriers. These deal types have seen volume rise 33.3% and 23.3% YOY, respectively, continuing ongoing roll-up efforts of environmental service providers across the remediation and reclamation value chains. The sector’s fragmented landscape will likely continue attracting buyers seeking scale, synergies, and access to mission-critical services as demand intensifies for infrastructure integrity, environment safety, and sustainable industrial operations.

Water & Wastewater Treatment Draws Intensified Investor Focus

The Water & Wastewater Treatment segment of the U.S. Industrial & Environmental Services market has drawn significant investments and acquisition activity. High barriers to entry due to high switching costs for customers have underscored a robust acquisition appetite within the Water & Wastewater Treatment space. Health risks tied to waterborne pathogens and regulatory scrutiny have incentivized users to stick with functional solutions, of which monochloramine has proven to be the most effective disinfectant in water systems, particularly in large buildings and healthcare facilities. As a result, buyers in the Industrial & Environmental Services market often acquire functional solutions to enter the market rather than organically producing a product and creating a new market for it. Regulatory oversight groups like the Center for Disease Control (CDC), Environmental Protection Agency (EPA), and the American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE) have established strict directives that require extensive sampling and facility assessments. New Jersey has been the latest state to enact a slew of ASHRAE water management programs to notify and report results to its health department for public notices. Additionally, qualified water treatment operators often require specialized certifications or engineering degrees in Chemical, Civil, or Mechanical fields, making it difficult for new entrants to recruit experienced talent. Other structural hurdles include steep operational costs, ongoing research and development (R&D) expenses, and the complex regulatory and intellectual property (IP) landscape surrounding water technologies—all of which reinforce the appeal of consolidation and scale via M&A strategies.

Rising public health concerns have also played a major role in shaping these market dynamics. Legionella bacteria, for example, naturally occurs in freshwater but becomes hazardous when water treatment is not done properly and biofilm build up occurs, spreading to human-made systems and threatening the efficacy of cooling towers or plumbing networks. A constant monochloramine feed has been shown to reduce Legionella colonization in building water systems more effectively than other treatment options, especially when used as part of a comprehensive water safety plan. In 2014, waterborne infections from the bacteria reached an estimated 7.2 million cases annually in the U.S., causing 120,000 hospitalizations and 6,600 deaths, according to the CDC.¹ As climate change increasingly impacts global temperatures and weather events, the risk of these infectious diseases will likely continue to worsen. States like Illinois have passed legislation mandating Legionella testing and water management programs in long-term care facilities, and additional states have followed suit. At the federal level, the Safe Drinking Water Act and Clean Water Act have driven tighter quality standards. In March 2023, the EPA proposed national drinking water limits for per- and polyfluoroalkyl substances (PFAS), or “forever chemicals,” marking a pivotal step in addressing long-term water-based contaminants. These regulatory moves have intensified demand for advanced filtration technologies and have spurred M&A interest in firms offering PFAS mitigation, water analytics, and remediation services.

In YTD 2025, the Water & Wastewater Treatment segment has been a key catalyst for rising M&A activity across the Industrial & Environmental Services market. Strict water treatment regulations, a growing focus on public health and water quality, and rapid urbanization have made these assets highly attractive to both strategic and financial buyers. This interest has spilled over into adjacent segments, fueling consolidation in areas like Industrial Cleaning, Liquid Waste, and Environmental Testing. To date, 34 deals have been announced or completed in the Water & Wastewater Treatment space, up from 24 in the prior year period. The segment’s accelerated momentum and long-term growth potential has underpinned investor confidence, demonstrated by the 41.7% YOY increase in deal volume. Several notable transactions in the Industrial & Environmental Services market are highlighted below.

• Capstone Partners Advises Barclay Water Management on its Sale to (December 2024) – Capstone Partners advised Barclay Water Management—a provider of water safety and digital monitoring solutions—on its sale to Ecolab (NYSE:ECL). The terms of the deal are confidential. Founded in 1932 and based in Massachusetts, Barclay Water Management provides differentiated water safety solutions, including a proprietary iChlor® Monochloramine System for the treatment of Legionella bacteria in drinking water systems. This secondary disinfection program improves water quality, extends the life of customer assets, and provides continuous on-line monitoring and control of water chemistry. Its Water Treatment group offers industrial and commercial water treatment solutions that extend the useful life of boilers, chillers, cooling towers, process heat exchangers, and piping systems as well as reduced utility plant operating costs by minimizing water and energy consumption. Ecolab’s acquisition of Barclays strengthens its position in the Industrial & Institutional Water Treatment space by adding advanced monitoring and service capabilities. The deal aligns with the broader sector’s trend toward tighter water use efficiency, stricter regulatory compliance, and rising demand for sustainable, technology-enabled water management solutions.

“We have a new and exciting opportunity to bring Barclay’s innovative water safety solutions to customers across North America. By aligning them with Ecolab’s complementary circular water solutions and our real-time monitoring ECOLAB3D^TM digital platform, we are creating a new platform for growth. Our comprehensive offering will help customers improve water safety while also enhancing operational performance through reduced water and energy use,” said Josh Magnuson, Executive Vice President and General Manager of Global Light Water.

• Azuria Water Solutions Acquires Guildner Pipeline Maintenance (June 2025, Undisclosed) – New Mountain Capital-backed Azuria Water Solutions acquired Guildner Pipeline Maintenance, a sewer and underground infrastructure maintenance and rehabilitation service provider (June 2025, undisclosed). Azuria creates rehabilitation solutions for various types of pipelines and has been a growing consolidator in the space. To date, Azuria has made approximately 20 acquisitions with BLD Services (June 2025, undisclosed), Am-Liner East (April 2025, undisclosed), TSW Utility Solutions (April 2025, undisclosed), and C.K. Masonry (April 2025, undisclosed), all joining the platform YTD. Demand for efficient rehabilitation solutions has continued to grow as existing pipeline systems reach the end of their services life. Azuria is expected to be well positioned to capitalize on this trend, leveraging operational expertise across brands to strengthen its national footprint and expand its offerings within the Water & Wastewater Treatment space.
• Inframark Acquires Mehall Contracting (May 2025, Undisclosed) – Water and wastewater technology firm, Inframark, acquired Mehall Contracting in May 2025. Terms of the deal were undisclosed. Inframark has completed five acquisitions in YTD 2025, including RCP Community Management (July 2025, undisclosed) and Cornerstone Properties (January 2025, undisclosed) to strengthen its Phoenix, Arizona base; Systems East (June 2025), undisclosed) to expand into the East Coast and improve technology systems integration service portfolio; and, Woodruff & Howe Environmental Engineering (WHEE) (April 2025, undisclosed) to improve its water management solutions. Since 2021, Inframark has been consistent in its capital deployment, completing at least two acquisitions per year to grow its operations and geographic presence. With Mehall’s strong client roster and proficiency in wastewater processes, the acquisition is expected to bolster Inframark’s municipal water treatment services and commercial and industrial (C&I) service offerings.

“Mehall’s long-term client partnerships and focus areas perfectly align with Inframark’s core water and wastewater operations, and the geographic focus within Arizona further bolsters our expanding regional presence. Adding their considerable skillset to our platform offers significant potential to leverage the value of our combined operations across the entirety of Inframark’s footprint,” said Steve Meininger, CEO of Inframark, in a press release.²

• SGS to Acquire RTI Laboratories (February 2025, Undisclosed) – Testing, inspection, and certification company, SGS (SWX:SGSN) announced its acquisition of environmental, chemical, and materials tester, RTI Laboratories, for an undisclosed sum (February 2025). RTI’s expertise in PFAS is anticipated to complement SGS’ current operations and increase its capacity for environmental and materials testing. The acquisition is expected to further develop SGS’ testing services portfolio, microplastics analysis capabilities, and national presence.

“The acquisition of RTI is a key step in executing Strategy 27. It strengthens SGS’s position as a leader in PFAS analysis, becoming our eighth PFAS and fifth Department of Defense-certified laboratory, while expanding capacity and support for clients in the Midwest… This expansion provides SGS clients with broader testing options and a local presence in Michigan, complete with pickup and courier services,” said Marcus Maguire, Head of Environment, Health and Safety at SGS, in a press release.³

The Industrial & Environmental Services market has seen steady demand driven by tightening regulations, infrastructure investment, and sustainability pressures. M&A has accelerated as strategic buyers and PE firms seek scale, geographic reach, and cross-service capabilities by capitalizing on these recent growth tailwinds. Capstone anticipates growth in Water Treatment segment-aligned services, where fragmentation enables consolidation strategies.

To discuss niches that have received heightened acquirer attention, provide an update on your business, or learn about Capstone’s wide range of advisory services and Industrial & Environmental Services market knowledge, please contact us.

Neve Adler, Analyst, was the lead Market Intelligence contributor to this article.

Julianna Zelnhefer, Summer Intern, also served as a Market Intelligence contributor to this article.

Endnotes

1. CDC, “Estimating Waterborne Infectious Disease Burden by Exposure Route, United States, 2014,” https://wwwnc.cdc.gov/eid/article/29/7/23-0231_article, accessed July 2, 2025.

2. Inframark, “Inframark Expands Its Capabilities and Presence in Arizona, Adding Wastewater Experts Mehall Contracting,” https://www.inframark.com/inframark-expands-its-capabilities-and-presence-in-arizona-adding-wastewater-experts-mehall-contracting/, accessed July 2, 2025.

3. SGS, “SGS Signs an Agreement to Acquire RTI Laboratories,” https://www.sgs.com/en/news/2025/01/sgs-acquires-rti-laboratories-strengthening-environmental-and-pfas-testing-capabilities, accessed July 2, 2025.