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A wave of grid modernization and clean energy construction saw Europe account for most of the biggest PE deals in the global construction and engineering sector in the first three months of this year.

According to PitchBook’s Q1 2026 Construction & Engineering Report, Europe accounted for seven of the 10 largest deals globally in the quarter.

Both deal count and deal value in Europe increased year-over-year in Q1, PitchBook data shows. Deal count hit a Q1 record at 157, rising 33% from last year, while deal value rose 62% YoY to €9.18 billion (about $10.6 billion).

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The largest deal in Q1 was I Squared Capital‘s $2.9 billion acquisition of Ramudden Global from Triton Partners in January. The Stockholm-based temporary traffic management platform operates more than 190 depots across 13 countries in Europe and North America.

Another significant deal was Colliers International‘s $700 million acquisition of Ayesa Engineering, a Spanish multidisciplinary civil engineering and project management firm, in February.

The common thread running through the quarter’s biggest deals is grid modernization, clean energy construction, and utility services, according to the report. It reflects a deliberate shift in how sponsors are responding to tariffs and an oil price shock from the Iran conflict.

Rather than pulling back, PE firms have tilted toward service-heavy businesses with lighter materials exposure and fee-based engineering and project management firms that pass cost increases through to clients, with electrical contracting, civil energy, project management, and testing standing out for their recurring revenue and clear paths to value creation.

Publicly traded peers in Europe indicate that demand for European C&E businesses remains strong. French transport infrastructure company Vinci reported a record $83 billion order book in Q1, up 4% YoY, with energy solutions emerging as a growth driver.

Swedish construction and project development company Skanska reported operating profit up 5% YoY, driven by datacenters and civil infrastructure projects.

While there is no question of demand, exits remain the biggest challenge for C&E. Sponsors nearing the end of their hold periods will be watching grid-focused strategic acquirers closely, as M&A remains the primary tool for building out service and capacity footprints in the sector.

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This article originally appeared on PitchBook News