EHS acquisition activity has reversed a two-year downtrend, with 61 transactions announced or completed in year-to-date 2026, up 15.1% year-over-year, according to a new report, June 2026 Environmental Health and Safety (EHS) Market Update from Capstone Partners. 

The company noted that while full-year 2025 deal volume represented a five-year low, improving financing conditions, stabilizing interest rates, and elevated safety services demand have contributed to rising M&A interest in the sector to date.

The authors of the report noted that increased appetite for middle market competitors with niche software offerings and strong revenue profiles has driven a three-deal uptick in private strategic M&A year-over-year.

Additionally, EHS companies used a strategy of turning to asset roll-ups as a faster, more efficient alternative to expanding market share and geographic reach organically.

Public acquirer dealmaking remained flat year-over-year, as larger buyers have prioritized balance sheet discipline and organic growth amid lingering valuation uncertainty.

Sponsor acquisitions in the sector have ticked higher, with private equity (PE) platforms comprising nine deals to date (up seven deals year-over-year). PE add-on activity has continued to expand—up three deals to date compared to the prior year period.

This follows a notable 47.9% year-over-year rise in 2025, when 71 sponsor-backed transactions comprised the largest share (48.3%) of sector M&A on record.

The trend has suggested that financial buyers view the environmental health and safety market as a high-potential consolidation and scalable growth play. 

"EHS remained a bright spot in a tepid 2025 M&A market as investors flocked to companies with steady demand not impacted by tariff noise or global geopolitical events," said Capstone Director Chris Cardinale, in a statement.

"Services, such as consulting, training, and staffing, were particularly strong as private equity groups demonstrated a strong appetite for industrial and business services. We expect 2026 to be much the same, with the potential for significant strength in EHS if the broader M&A market improves."