2025 Wrapped: Built Environment & Industrials
2025 has been a challenging year for investment in the UK built environment & industrials sectors. According to Pitchbook data, both deal volumes and values declined compared to 2024, reflecting broader market headwinds and cautious investor sentiment.
Several factors contributed to this slowdown. Growth in construction and manufacturing productivity remained sluggish, compounded by low confidence in the UK economy. A shortage of high-quality assets coming to market further constrained activity. Additionally, private equity investors continued to prioritise recurring revenue, earnings stability, and quality—criteria that can be difficult to meet in sectors where revenues are often project-based or concentrated among a small client base.
Despite these challenges, there were pockets of resilience and opportunity. Aerospace and defence stood out, with four notable deals completed. The outlook here remains positive, supported by Labour’s commitment to increase defence spending and a growing emphasis on SMEs as critical components of the supply chain.
The Testing, Inspection, Certification and Compliance (TICC) sector also maintained momentum, driven by aggressive buy-and-build strategies. Phenna Group and Celnor led the charge, completing 15 and 13 acquisitions respectively in 2025. Similarly, compliance services and facilities management attracted investment, with PE-backed businesses such as Obsequio and Andwis either expanding through acquisitions, securing additional funding, or both.
Armstrong has been active across these sectors throughout the year, supporting consolidators and investors on their buy-and-build strategies. From our perspective, several key investment themes have emerged:
- Targeting markets with stable or growing demand, often underpinned by regulation.
- Backing professionalised businesses in the £3–10m EBITDA range, particularly in markets historically dominated by small local providers or large, inefficient generalists.
- Preference for recurring-revenue, maintenance-focused models.
- Exploiting fragmentation to build scale, geographic reach, and specialist capabilities.
- Leveraging technology—either as a product or as a tool to drive operational efficiency.
Beyond these core areas, Armstrong’s built environment & industrials team has also worked across a diverse range of sectors, including printing and packaging, proptech, industrial technology, marine infrastructure, network testing, power and lighting products, workplace health and safety, and engineering training.
While 2025 presented challenges, it also reinforced the importance of disciplined investment strategies and sector expertise. Looking ahead, we expect continued interest in regulated markets, recurring-revenue models, and technology-enabled businesses, alongside ongoing consolidation plays.
To discuss opportunities in the built environment & industrials sectors, please contact:
Matt McNally
mmcnally@armstrong-ts.com
+44 7894 736 523