Perspectives

Brooks Crankshaw - Managing Director, Balmoral Advisors

Brooks Crankshaw

Managing Director

Brooks Crankshaw

Managing Director

In my weekly interactions with investors involved in M&A and capital formation, I consistently engage in discussions about various investment opportunities across different industries. Recently, I have noticed a growing interest among investors in acquiring companies within the realm of environmental services. Despite varying definitions of this sector, investors are intrigued by the notable growth observed in certain areas within the industry.

The Booming Market for Environmental Restoration

The global remediation market, as projected by PS Market Research, is expected to expand at a compound annual growth rate (CAGR) of 7.5% from 2022 to 2030. Growth in North America is being propelled by the rise of environmentally sustainable industries, rapid population expansion, and industrialization in emerging economies. Of particular focus within remediation are efforts related to fire and flood remediation, driven by the increased frequency of natural disasters.

Regulatory factors also contribute to investors’ interest in environmental services for acquisitions. For instance, last year, the Environmental Protection Agency (EPA) identified 22 new sites earmarked to receive $1 billion in funding for environmental remediation, covering issues such as manufacturing facility cleanup, groundwater and soil contamination, and oil spill mitigation.

Innovations and Growth in Water Treatment and Reuse

According to Fortune Business Insights, the global water and wastewater treatment market is poised to grow at a CAGR of 7.5% from 2023 to 2030. This growth is fueled in part by the heightened demand for treated water in the United States, particularly from the beverage and pharmaceutical sectors.

Another significant driver in this subsector is the expanding market for wastewater treatment services, coupled with growing concerns about freshwater resource depletion amid a burgeoning global population. Anticipated expansions in pharmaceuticals, food and beverage, and energy industries are also expected to drive demand for water filtration equipment.

Technological advancements further bolster growth prospects. Innovations such as oxidation technology, which enhances wastewater reuse, are being embraced by environmental consultants to enhance municipal wastewater treatment processes.

Catalysts for Green Investment

Beyond the growth drivers within these sectors, macroeconomic factors such as labor shortages, supply chain complexities, and fragmented industry landscapes are piquing investor attention.Ā  In addition, ongoing discussions surrounding climate change and carbon emissions are accelerating investor interest and M&A activity.

As investors are increasingly eyeing environmental services for acquisitions, the sector’s broad appeal may lead to a surge in demand for high-quality investment opportunities. For business owners considering a sale, this trend presents a prime opportunity. By proactively preparing for these market dynamics, they can position their companies as attractive, lucrative acquisition targets for those looking to invest in the promising arena of environmental services.

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