Electrical Power Solutions 2025 Review & 2026 Outlook (Baird)
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BairdSummary
- Baird's 2025 electrical power solutions M&A metrics show ~$4 billion of total transaction value across 7 transactions.p.3
- Average transaction value was ~$500 million and the average EV/EBITDA outcome was ~16x.p.3
- U.S. utilities have entered an investment cycle with ~$1.1 trillion of projected capital investment (2025 – 2029P).p.8
- The global data center liquid cooling market is projected to grow at a ~33% CAGR (2025 - 2032P).p.8
- Electrical / Grid and Services peers outperformed the broader market over the last twelve months (82% and 60% respectively vs. 34% for BICC).p.14
- Global M&A deal values surged 36% year-over-year to reach $4.3 trillion in 2025.p.19
Key insights
- Combined record backlogs of ~$52B at Quanta Services and EMCOR provide 24+ months of revenue visibility.p.9
- Dynamic Line Rating can deliver an immediate capacity increase of 20-40% within 1-3 months.p.8
- Data center peers trade at a significant premium multiple of 5.5x over the industrial market.p.14
- Large power transformer lead times now exceed two years, making equipment availability the key bottleneck in AI-driven grid expansion.p.10
- A new data center requires $3.1 million of electrical distribution equipment per MW of capacity, while a retrofit requires $2.5 million per MW.p.13
- Megaprojects of $1B+ reached $239 billion in Q3 2025 announcements.p.19
- Utility power provided to data centers rose by 11.3 GW in 2025.p.19
- Backlogs include Eaton's $15.5B and Vertiv's $9.5B, providing visibility into sustained double-digit growth through 2026.p.19
Topics and entities
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