technical capabilities that enable it to design and install complex, medium-and low-voltage electrical systems in hospitals, semiconductor manufacturing facilities, airports, and data centers. Schmidt Electric is growing rapidly and has superior profit margins compared to other contractors. Schmidt Electric’s backlog of work was large and rapidly growing, ensuring years of contracted work. Finally, Schmidt Electric’s CEO and owner was willing to stay on and lead Schmidt for a number of years after acquisition. Family-owned transactions often involve unique considerations beyond valuation. What were some of the key priorities that shaped this process? How did you help balance maximizing value with finding the right long-term partner for the family and business? After we received indications of interest from a large and diverse group of potential buyers, we conducted one-on-one management meetings with a select group of high-quality buyers – some strategic, some private equity. As management met with the different potential buyers, it became clear to the owner what he valued the most in the transaction. He wanted to sell to an organization that provided his employees with the greatest opportunity for professional growth, long after he retired. We negotiated a fair value for the business with that objective in mind. What lessons from this transaction would be most valuable for other manufacturing and industrial business owners considering a sale in the next several years? Quality detailed financial reporting is one of the most important aspects of selling a contracting business. Buyers want to understand: Can you self-perform on complex work? Can you perform consistently profitably on your jobs – big and small? How does your actual job profitability compare to your expected profitability on your bid – do you consistently underperform or overperform? Do you have the systems and procedures in place to accurately report data and deliver it on a timely basis?
If a company is considering a sale, evaluating financial systems and processes is critically important.
Industrial M&A: What Dealmakers Should Watch
Contributors: David Harper and Brian Sims
Industrial and manufacturing M&A activity accelerated through the first half of 2026, fueled by continued investment in artificial intelligence (AI) infrastructure, grid modernization, defense spending, onshoring initiatives, and broader access to capital. While buyer demand remains strong, particularly among strategic acquirers pursuing larger, thesis- driven transactions, dealmakers are operating in a more complex environment marked by tariff uncertainty, geopolitical volatility, rising energy costs, and evolving financing markets. As a result, buyers and sellers are increasingly focused on value durability, margin preservation, and execution certainty, recognizing that issues once considered ancillary can now have a material impact on valuation and deal outcomes. Three considerations have emerged as critical priorities for industrial transactions. First, AI and automation have become core diligence workstreams. Beyond evaluating how a target uses AI today, buyers are assessing opportunities for future deployment, while also scrutinizing intellectual property ownership, data security, vendor dependencies, and governance controls designed to mitigate inaccurate or unreliable AI outputs. These considerations are increasingly central to operational efficiency, digital integration, and long-term value creation. Second, tariff, tax, and customs exposure have become significant transaction risks, particularly as manufacturers balance reshoring strategies with continued reliance on imported raw materials and components. Dealmakers should
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