Despite a period of subdued growth, the UK built environment remains one of the economy’s largest and most complex sectors. Valued at over £560bn and employing roughly 12% of the national workforce, it underpins everything from housing and infrastructure to energy transition and public safety. Yet it is also a sector that has historically been slow to adopt new technologies and modern data practices. While the role of technology has been widely discussed, data itself is emerging as a distinct opportunity.

The scale of the industry means it generates vast volumes of information across design, construction, operation and regulation. At the same time, rising compliance requirements, stricter building safety regimes, pressure to decarbonise assets, and escalating labour and material costs are all increasing demand for better, more actionable data. Initiatives such as the “golden thread” of building information, mandatory energy performance disclosures, and growing ESG scrutiny are turning data from a nice-to-have into a necessity.

However, size of opportunity alone does not guarantee success, and investors need to be selective.

Adoption remains the first test. A large theoretically addressable market is meaningless without evidence that customers are changing behaviour. The most compelling data businesses show organic growth through new customer wins, not simply higher average revenue per user. Crucially, the data must solve a mission-critical problem more effectively than spreadsheets, consultants or internal workarounds.

Competition is intensifying, not only from other data providers but from AI-enabled tools. If generative models can deliver 80% of the insight at minimal cost, investors must ask whether the remaining 20% justifies a premium. In many cases, it will only do so if accuracy, auditability or regulatory assurance truly matter.

This places renewed emphasis on proprietary data. Exclusive access to hard-to-replicate datasets—such as long-term asset performance, real operational benchmarks or validated compliance records—remains a key differentiator, particularly as AI commoditises generic information.

Finally, the strongest propositions extend beyond raw data. Layering analytics, benchmarking, predictive insights or preventative maintenance workflows can embed data into day-to-day decision-making and materially increase switching costs.

Data in the built environment is a promising space, but enthusiasm should be reserved for businesses where the data is essential, defensible and capable of underpinning a broader, service-led offering.

To discuss any of these themes in more detail, please contact:

Matt McNally

mmcnally@armstrong-ts.com
+44 7894 736 523

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Over the past few years, investor attention across the built environment and industrials landscape has understandably gravitated towards services and technology. Regulatory tailwinds, particularly around fire safety and compliance, have driven demand for recurring revenues, while buy‑and‑build strategies have offered rapid scale and cross‑sell opportunities. Technology, meanwhile, continues to attract capital for its scalability and margin potential.

Over the past few years, investor attention across the built environment and industrials landscape has understandably gravitated towards services and technology. Regulatory tailwinds, particularly around fire safety and compliance, have driven demand for recurring revenues, while buy‑and‑build strategies have offered rapid scale and cross‑sell opportunities. Technology, meanwhile, continues to attract capital for its scalability and margin potential.

Yet as we look ahead, there is a compelling case for revisiting specialist products—particularly advanced, low‑volume, high‑mix manufacturing, an area where the UK has long excelled.

High‑quality product businesses can offer several attractive characteristics. When aligned with structurally growing end markets, demand is often repeatable and resilient, supported by long replacement cycles and embedded specifications. Many of these businesses are underpinned by genuine intellectual property, proprietary designs, and deep application know‑how that differentiate them from both domestic and overseas competitors. Barriers to entry tend to be meaningful: significant upfront investment in capex and R&D, lengthy certification processes, and the difficulty of being approved as a supplier to OEMs or Tier 1 integrators all act to protect market positions. Crucially for investors, these dynamics often translate into clearer, more reliable forward order visibility, simplifying diligence and business planning.

End‑market selection remains critical. We see three areas in particular standing out:

• Aerospace & defence, where rising government and NATO‑aligned spending is increasingly flowing to specialist UK suppliers delivering mission‑critical components and subsystems.
• Data centres, where sustained growth driven by cloud computing and AI is creating demand for highly specified products spanning power management, cooling, fire suppression and physical infrastructure.
• Renewables and energy transition, supported by strong policy backing and a strategic push to localise supply chains, favouring UK‑based manufacturers with the right technical capabilities.

There are additional tailwinds worth noting. Reshoring trends, the need for supply‑chain resilience, and customers’ willingness to pay for reliability and compliance all enhance pricing power. Well‑run product businesses can also offer attractive exit optionality, whether to strategic acquirers seeking capability gaps or to sponsors pursuing platform builds.

While services and tech will rightly remain core areas of focus, investors may find that specialised, in‑demand products provide a complementary—and often underappreciated—route to defensible growth and value creation in 2026 and beyond.

To discuss any of these themes in more detail, please contact:

Matt McNally

mmcnally@armstrong-ts.com
+44 7894 736 523

Email Matt

Artificial intelligence (AI) is reshaping the fundamentals of consulting. For investors and management teams, it accelerates the speed at which insight can be generated, sharpens analytical accuracy, and frees Consultants to focus on strategic interpretation and value creation. As AI becomes embedded across consulting workflows, judgement is enhanced, strengthening the quality of decisions and increasing confidence in findings throughout the investment process.

At Armstrong, our in‑house AI‑powered tools play a critical role in accelerating exploration and understanding. By reducing the time spent on low‑value, manual tasks, Consultants can dedicate more attention to market dynamics, assessing management plans, and addressing key strategic questions. The result is faster, clearer and deeper recommendations, without compromising the integrity, independence or commercial nuance expected of our work.

Robust commercial insight still depends on reputable, triangulated sources. AI systems help us identify and interrogate a wider range of data points and views more efficiently, rapidly building a knowledge landscape informed by trusted inputs aligned to the hypotheses. This means early-stage thinking is grounded in high‑quality evidence, enabling the team to refine hypotheses quickly and allocate more time to deeper, high‑value analysis.

For investors, this means a higher degree of confidence earlier in the process. For our Consultants, it means more energy spent on interpretation and commercial judgement, where human analysis and critical thinking add the greatest value.

To explore how advanced AI capabilities, combined with Armstrong’s deep sector expertise, can support investors, speak to a member of the team.

Tom Hayward

thayward@armstrong-ts.com

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Commercial Due Diligence (CDD) is seen as a critical element of the diligence suite for a PE transaction. And what CDD ‘looks like’ is well understood. Market and competitor analysis, customer referencing, perhaps a data analysis section, and a review of the business plan, are all what might be called standard modules.

However, for CDD to be truly value-add, it needs to provide a rounded view of the business being analysed; what is it now, what could it be in the future, and what do we need to do to get it there?

That’s where the ‘good’ comes in. CDD shouldn’t focus either on the ‘inside-out’, or the ‘outside-in’. All of the elements need to sit together to provide a holistic view of opportunities and risks. Market and competitor work needs to dovetail with what the customers are actually saying. Data analysis needs to dovetail with what the Customers are actually doing. The business plan analysis needs to dovetail with what is realistically achievable from both current and potential customers, given the shape of the business and the products/services it offers. And all of this needs to be presented concisely, with answers that are to-the-point and timely, to fit in with deal deadlines.

Who are our customers now, what are we selling to them, and how? What do these customers really think of us? What does our Ideal customer look like, how can we find more of them, and at what cost? Does the market give us enough headroom? Do our products and services fit what the customers are looking for now, and what they are likely to be looking for in the future? What are our competitors doing, what are they likely to be doing in the future, and what should we do about it? Is the business geared up for its growth plans?

At Armstrong, we have over 20 years experience in figuring out the right questions to ask, and delivering holistic answers to these questions. Contact us to discuss any opportunities you may be looking at.

Peter Cookson

pcookson@armstrong-ts.com
+44 7871 425 467

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Renewable energy continues to move from the margins to the mainstream. In the UK, renewables supplied around half of total electricity generation in 2024, with solar deployment accelerating sharply in 2025 and wind power remaining the backbone of the system. Globally, the pace is even more striking: international energy agencies forecast that new renewable capacity added between 2025 and 2030 will be roughly double that of the previous five‑year period, driven by decarbonisation targets, energy security concerns and falling technology costs.

Yet for UK mid‑market investors, renewable energy is not a straightforward growth story. Business linked directly to power generation assets can be exposed to planning delays, grid constraints, policy risk and customer concentration. Given the early-stage nature of the sector, it is also difficult to identify long‑term winners. As a result, some of the most attractive opportunities don’t sit in power generation itself, but in the ecosystem that enables the energy transition.

One such area is testing, inspection and certification (TIC). As renewable assets scale and age, demand is rising for independent inspection of sites and components, from wind turbine blades to solar inverters. The TICC sector has long been favoured by investors for its resilience and recurring revenues, and technology‑enabled inspection, monitoring and predictive maintenance only strengthen that appeal. Read our recent article HERE.

Energy transition infrastructure is another compelling angle. The expansion of renewables depends on significant investment in grid upgrades, battery storage and EV charging networks. Service providers supporting this build‑out benefit from long‑dated structural demand without being directly exposed to power generating assets.

The waste and circular economy also offers scope for growth. With the UK waste management market expected to expand materially over the next few years, regulation and corporate sustainability commitments are driving demand for services ranging from IT asset disposal to specialist environmental consultancy.

Finally, software, data, and skills are emerging bottlenecks. Asset owners increasingly need sophisticated tools to manage energy usage, optimise performance and control costs, while acute skills shortages are fuelling demand for high‑quality training and education providers.

For investors, while renewables themselves may be complex, the picks‑and‑shovels of the energy transition can offer a more diversified and resilient route to capturing long‑term growth.

To discuss any of these themes in more detail, please contact:

Matt McNally

mmcnally@armstrong-ts.com
+44 7894 736 523

Email Matt

The Testing, Inspection, Certification and Compliance (TICC) sector has been a fixture of private equity interest for a long time now, and as 2026 unfolds, its appeal remains intact. Long-term structural drivers continue to underpin the investment case: increasingly stringent regulation, rising safety and sustainability standards, and the critical role TICC plays across infrastructure, energy, manufacturing and consumer markets. Crucially, demand remains resilient, with low cyclicality relative to many industrial services sectors.

The market’s fragmentation continues to create fertile ground for buy-and-build strategies. Investors can scale platforms through selective acquisitions, enhancing technical capabilities, expanding vertical coverage and broadening geographic reach—often unlocking multiple expansion and operational leverage along the way. Exit routes remain well-defined, with sustained appetite from both strategic buyers and larger-cap funds.

What has evolved materially in recent years is the role of technology. Artificial intelligence, data analytics, robotics, drones and predictive maintenance tools are increasingly embedded across the value chain. Rather than replacing technical expertise, these technologies augment it—improving asset utilisation, data quality, compliance tracking and customer reporting. As a result, customers are raising expectations, favouring providers that demonstrate innovation, digital maturity and forward-thinking delivery models.

Alongside this, many operators are moving “beyond the test”, shifting towards integrated testing-and-servicing propositions that deepen customer relationships and improve revenue visibility.

Challenges remain, particularly for mid-market investors. The sector is increasingly bifurcated between small, niche specialists and large, scaled platforms, making the identification of an investable entry point at the right size and price more difficult. Valuations for high-quality assets also remain robust.

Therefore, businesses that can credibly position themselves as scalable TICC platforms—combining regulatory relevance, technological enablement and acquisition potential—are likely to remain in strong demand throughout 2026.

To discuss any of these themes in more detail, please contact:

Matt McNally

mmcnally@armstrong-ts.com
+44 7894 736 523

Email Matt

As the ERP market shifts from legacy on‑premise systems towards the cloud, investors evaluating ERP service providers must understand how product lifecycles, customer needs, and market maturity shape partner performance. Armstrong explores how these factors shape the assessment of attractive assets in this space.

SAP ECC: A case study on retirement and migration cycles

The retirement of long‑established systems clearly illustrates how revenue models, service demand, and competitive dynamics change once a product approaches end of life. This has created new and interesting opportunities for investors.

SAP ECC’s upcoming retirement has demonstrated the disruption and opportunity created when an ERP platform reaches end of life. With ECC support winding down and customers migrating to SAP S/4HANA, service providers face an unusually large replacement cycle. Several investment implications follow:

• A mandatory wave of migrations: Organisations running ECC cannot remain on the platform indefinitely, which drives strong demand for partners with SAP S/4HANA migration capability.
• Transformation of revenue mix: Providers that rely heavily on ECC support and maintenance are at risk unless they shift toward S/4HANA transformation programs. Partners already certified and experienced in S/4HANA delivery enjoy stronger pipelines and premium pricing.
• Skills drive competitive differentiation: S/4HANA migration requires specialised expertise, given its bespoke nature. Investors should prioritise providers with proven methodologies and credible delivery histories of migration.
• Opportunities for broader digital transformation: ECC to S/4HANA transitions often expand into cloud hosting, automation, analytics, and integration services. This increases cross‑sell potential and recurring revenue.
• A change of ecosystem: There was a portion of ECC customers that decided that S/4 HANA was not suitable for their needs, driven by the cost of the tool itself which was further compounded by a lengthy and complex multi-year migration. These customers migrated to other cloud-native providers, often going to market engaging in formal selection processes.

This pattern mirrors what is occurring or is about to occur in other vendor ecosystems over the next decade; product sunset readiness is a critical investment lens (e.g. Sage 1000 and Oracle’s JD Edwards). ERP service providers who have strong migration capabilities and align themselves with future-focussed products will be well placed to capitalise from this shift.

Service-centric vs. product-centric ERP: Why sector fit matters

ERP systems differ significantly in design philosophy. Some are built to support service‑based operating models such as professional services, consulting, and other asset‑light industries, while others are designed for product‑based models including manufacturing, distribution, and inventory‑driven supply chains.

Sector fit is critical, particularly during vendor retirements that force clients into high‑stakes migrations. ERP services firms whose expertise and vendor partnerships align with the customer’s operating model can deliver faster, with fewer customisations, lower implementation risk, stronger adoption, and more predictable margins as customers become increasingly selective.

Investors should therefore assess whether an ERP services provider can guide customers to the right target platform following a legacy product retirement, not just execute the migration. This is typically driven by the service provider having a strong track record across a broad product suite; this can be within one or multiple vendors.

Customer size dictates product fit and provider economics

ERP ecosystems are segmented by organisation size, and this has significant implications for investors.

Systems such as Sage Intacct, Acumatica, NetSuite, and Microsoft Business Central meet the needs of fast-growing SME and mid-market organisations. They offer usability, rapid implementation, and lower ownership cost. Providers benefit from high volume and recurring subscription revenue but usually operate at lower margins per project.

Platforms including SAP S/4HANA, Oracle ERP Cloud, and Workday support mid to large enterprises, which will likely have more complex and globalised needs. Providers in this segment achieve higher day rates and deliver multiyear transformation engagements but face longer sales cycles and specialised talent requirements.

Investors should assess how the partner’s target market aligns with their delivery model, pricing structure, and reference base.

Ecosystem maturity, training pathways, and talent availability

The maturity of an ERP ecosystem affects provider scalability. Large ecosystems offer global training resources, strong communities and extensive third-party integrations while smaller ecosystems limit available talent, increase hiring costs and slow scale up.

Investors should examine talent availability, career development pathways and offshore capability.

Localisation and market adaptation

Some ERP products require localisation for specific geographies. For example, certain US focused ERPs require UK tax, reporting, or compliance extensions. Providers with prebuilt IP, strong regional vendor relationships, and referenceable customers have a clear advantage.

In summary, leading ERP service providers distinguish themselves through future product focus, proven migration capability, sector‑aligned specialisation, clear customer‑size targeting with repeatable delivery models, strong vendor‑ecosystem alignment, and regional localisation IP.

To discuss any of these themes in more detail or learn about our credentials in this space, please email:

Anjali Obhrai

aobhrai@armstrong-ts.com

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In recent years, investment in the UK built environment compliance space has been dominated by blue‑collar services such as fire safety, FM, and water and air quality. These markets remain attractive due to the volume of work required, regulatory pressure and fragmentation, but a shift is underway: attention is increasingly shifting to white collar built environment and compliance services.

In recent years, investment in the UK built environment compliance space has been dominated by blue‑collar services such as fire safety, FM, and water and air quality. These markets remain attractive due to the volume of work required, regulatory pressure and fragmentation, but a shift is underway: attention is increasingly shifting to white collar built environment and compliance services.

Demand is rising across planning, cost consultancy, procurement support, energy efficiency advisory, data-led surveying, and broader regulatory compliance services. Many of the same forces driving blue‑collar demand—tightening regulations, ESG scrutiny, and the adoption of digital compliance frameworks such as the “golden thread”—are now shaping the professional advisory landscape. White‑collar providers benefit from typically higher margins and strong potential to integrate technology platforms that build stickier client relationships and create recurring revenue streams.

Still, this segment comes with structural challenges. Much of the work is project‑driven rather than truly recurring, meaning revenue visibility can fluctuate. Firms exposed to early‑stage construction cycles face the risk of project delays or cancellations, and the wider construction market remains sensitive to economic conditions. Professional services businesses also grapple with differentiation in a crowded market, attracting and developing junior talent, and managing key‑person dependency.

Yet despite these hurdles, the opportunity is growing. High‑growth sectors—most notably data centres, infrastructure, and sustainability‑led development—are creating increasing demand for specialised advisory and compliance expertise. As regulatory complexity continues to rise and clients seek more integrated, technology‑enabled support, white‑collar compliance is well‑positioned to become a major value driver within the built environment ecosystem.

For investors, now is an ideal moment to take a closer look at this interesting part of the market.

To discuss any of these themes in more detail, please contact:

Matt McNally

mmcnally@armstrong-ts.com
+44 7894 736 523

Email Matt

For years, the built environment lagged other sectors in technology adoption. But several factors point to increased demand. Sustainability pressures, efficiency targets and new regulatory obligations are accelerating the need for digital tools across construction and property operations. The UK smart buildings market is already estimated at over £5bn and growing at a double‑digit CAGR.

Technology now touches every stage of the built‑environment lifecycle. Energy Management Systems (EMS) continue to see heightened demand as organisations pursue net‑zero strategies and attempt to offset energy volatility; the UK EMS market alone is valued at over £800m. Digital twins and rich geospatial datasets are enabling more accurate planning, modelling and operational insights, while compliance and maintenance platforms are becoming essential tools for meeting “golden thread” expectations and tightening regulatory oversight.

Despite this momentum, investors must navigate a series of nuanced challenges. Adoption may be rising, but many end users remain cost‑constrained, particularly in public sector estates. The key question: does positive sentiment translate into real, timely buying behaviour, or will spend be reprioritised toward more immediate operational needs?

Market structure presents another layer of complexity. Value capture differs substantially between manufacturers, integrators, installers and service providers, each with distinct margin profiles and levels of stickiness. Meanwhile, competition is intensifying. Large incumbents increasingly offer integrated, end‑to‑end solutions, leaving smaller niche players to prove they have a clearly defensible right to win—whether through vertical specialisation, superior data, or differentiated service models.

Overall, Armstrong expects to see opportunities in built environment tech over the next year, but these opportunities are likely to have knotty questions, which need to be ironed out before investors can proceed with confidence.

To discuss any of these themes in more detail, please contact:

Matt McNally

mmcnally@armstrong-ts.com
+44 7894 736 523

Email Matt