Mechanical, Electrical & Plumbing (MEP)
Mechanical, electrical, plumbing, and fire protection contractors performing building systems installation and service.
- 5
- Verticals
Overview
Mechanical, Electrical & Plumbing (MEP) covers the specialty trade contractors that install and service building systems — electrical, plumbing, HVAC, and other mechanical equipment. At ~$589B across nearly 200,000 establishments, it is the largest specialty-trade segment and the single most active corner of construction for private-equity roll-ups.
Demand is driven by both new construction and the recurring service, maintenance, and retrofit of existing building systems — the recurring side (service contracts, repairs, replacements) being especially attractive. Electrification, data centers, and energy-efficiency retrofits are structural tailwinds. It is highly fragmented and consolidating fast.
Market snapshot
- Market size
- ~$589B
- Growth
- ~7.5%CAGR (2017–22, nominal)
- Companies
- ~193,336 firms
89.6% of firms have fewer than 20 employees: 173,222 micro-businesses, below most mandates.
- 20–99
- 17,19886%
- 100–499
- 2,39312%
- 500+
- 5233%
The deepest acquisition pool in construction — nearly 200,000 firms, nine in ten under twenty people — and the segment where roll-ups have concentrated, because service and retrofit work recurs against an installed base while new-build does not. Growth here outpaced general contracting, which is the aftermarket showing through.
NAICS 238210, 238220, 238290. U.S. Census Bureau — 2022 Statistics of U.S. Businesses; U.S. Census Bureau — 2022 Economic Census.
Business model & economics
Revenue model
Installation contracts plus recurring service and replacement
Key economics
- Revenue per firm
- $3,047,945
- Revenue per employee
- $258,417
- Employees per firm
- 11.7
- Recurring revenue
- Moderate
- EBITDA margin
- Service work higher-margin than install
- Capex intensity
- Moderate
recurring service, maintenance, and retrofit
Characteristics
- Balanced cost base — payroll is 27% of revenue, leaving room to scale margin without cutting staff
- Deep strategic-buyer pool — 523 firms exceed 500 employees, so a scaled asset has trade buyers
- Largest specialty trade; the hottest PE roll-up corner.
- Recurring service and replacement especially attractive.
- Electrification and data centers structural tailwinds.
NAICS 238210, 238220, 238290. U.S. Census Bureau — 2022 Statistics of U.S. Businesses; U.S. Census Bureau — 2022 Economic Census.
M&A deal context
Who’s acquiring
- PE-backed MEP & HVAC platforms
- National service consolidators
- Facilities & mechanical strategics
What’s driving deals
- Aggressive roll-up of fragmented trades.
- Recurring-service revenue and replacement cycles.
- Electrification and efficiency-retrofit demand.
Verticals in this segment
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