Infrastructure M&A starts 2026 strong with a robust Q1 performance
UK infrastructure deal volumes reached 86 transactions in the first three months of 2026, up from 83 in Q1 2025, standing out against a softer, lower mid‑market M&A backdrop across other UK sectors. The activity continues to be driven by service‑led and future‑facing segments, while construction‑led markets continue to lag following a difficult 2025. This is according to Heligan Group’s UK Infrastructure M&A Q1 report.
Engineering & Contracting Services was the most active sector with 29 deals compared to 17 in Q1 2025, while Energy & Utilities recorded 15 deals, driven by electrification and energy-transition demand.
Private equity and PE-backed platforms accounted for over 50% of all transactions, with Inbound international investment representing 45% of total deal volume. Diversified Groups saw the largest decline in activity, with 4 deals completed versus 9 in 2025.
Notable deals included Severn Trent Services’ acquisition of Howlett Associates Water, Nordic Climate Group AB’s acquisition of All Cool NW, Cardo Group’s acquisition of Trident Maintenance, Service and Dalcour Maclaren’s acquisition of Geomap.
Q1 also marked a decisive shift for UK electricity transmission, with RIIO-3 moving from negotiation into implementation with an approved £28.1bn of upfront investment within a broader potential £90bn pipeline. The updated National Infrastructure Pipeline also increased to £718bn over 10 years, up from £530bn in 2025.
Andrew Dickinson, head of infrastructure services at Heligan Group, said, “Whilst trading challenges still exist across pockets of value chains, the progression of strategic projects remains tempered by delays in approvals and budgetary challenges. But conversations with buyers, founders and management teams still point to a wealth of opportunity.”
“Topping the list of investment priorities for many serial acquirers are services supporting energy and wastewater infrastructure. Although businesses addressing these markets have been acquired in the quarter, demand is far from satisfied.”
“Perhaps most prominent today, given the conflict in Iran and the UK’s continued dependence on global markets, is the need to transition the grid network from a system built for the fossil-fuel era to a flexible, high-capacity network capable of serving a new suite of demands.
“The nation’s wastewater network also needs improvement and expansion. A factor relevant to private-sector appetite is the announcement to break up Ofwat and introduce a single integrated water regulator, a step which signposts that the £104 billion of improvements under AMP8 will be delivered.
“Given that AMP7 spend was close to half this amount, and AMP9 onward is expected to include further advancement, assets in this space are expected to command premium prices. But UK Infrastructure Services offers a great deal of opportunity beyond these areas as almost all aspects of UK infrastructure carry elements of underinvestment, regulatory-driven activities or the adoption of value-adding technologies.”
Private equity, infrastructure funds and international acquirers continued to target the UK in Q1, seeking to secure platforms before delivery gathers pace and valuations re‑rate.
“Financial sponsors and PE‑backed platforms accounted for over half the quarter’s transactions, underscoring the sector’s alignment with buy‑and‑build strategies”, added Dickinson. “Recent improvements in fiscal clarity and the reactivation of delayed pipelines are drawing transactions back to the market. The April 2026 BADR rate increase from 14% to 18% also brought forward a number of owner‑managed business sales in the quarter.
“While transactions continue to take longer and buyers continue to tread carefully through processes, it is widely believed that improving deal volumes reflect a market which is starting to acclimatise to uncertainty and appreciate the bigger picture opportunity.
“The rise in Q1 deal activity makes one thing clear: committed capital is bringing confidence back to the sector. Whether deployments have begun or not, those commitments are giving investors the conviction to move”, Dickinson concluded.