Every quarter, we step back from individual deals and look at the patterns showing up across all of them. At the close of Q2, we shared what we were seeing heading into the back half of the year. Now that Q3 is wrapping up, it's time for the next read.
If you're a business owner in construction, HVAC/MEP, BMS, specialty trades, or energy services, you've probably heard some version of the same message lately: the market is slowing, buyers are pulling back, and now might not be the time. That's not what we're seeing. What we're seeing is more specific than that, and for owners thinking about their timing, it matters a lot more.
The Q3 readout
Where things stand at the close of the quarter.
| Multiples for well-prepared businesses | Holding steady |
| Deal structure | More contingent |
| Diligence periods and retrades | Longer, and up |
| Gap between prepared and unprepared sellers | Widening |
Valuations Held. The Path to Them Changed.
For well-prepared businesses, multiples have largely held steady this quarter. Buyers are still paying for quality, and the headline numbers attached to strong companies look much like they did earlier in the year.
What has changed is how buyers get to that number.
More deals this quarter used some form of contingent or deferred consideration to close the distance between what a seller wanted and what a buyer was willing to commit in cash at closing. Earnouts, rollover equity, and holdbacks all showed up more often. The headline price stayed intact, but a larger share of it moved off the closing table and into the future, tied to performance, time, or the seller's continued involvement.
None of these tools are new, and none of them are inherently bad. But the trend is clear. Buyers are protecting themselves through structure rather than through price. For a seller, that means the multiple on the letter of intent tells you less than it used to about what you'll actually walk away with on day one.
Buyers Are More Deliberate, Not Less Interested
The second pattern follows naturally from the first. Diligence periods stretched longer this quarter, and retrade activity ticked up.
It would be easy to read that as hesitation. We don't think it is. The buyers we're seeing are still active and still competing for good businesses. They're simply doing more work before they commit, and they're more willing to revisit terms when diligence turns up something that doesn't match the story they were told.
This connects directly to themes we covered earlier in the quarter. The period between signing and closing is where deals are won or lost, and diligence is where a buyer decides whether the business they're buying is the one that was presented. When buyers slow down and look harder, every gap in a seller's preparation has more time to surface.
The Gap Between Prepared and Unprepared Sellers Is Widening
Put the first two shifts together and you get the most important pattern of the quarter.
Businesses that came to market with clean, reliable financials, low dependence on the owner, and a real data room ready from day one are still getting close to full value. Their deals are moving with less friction, fewer retrades, and less of the price pushed into contingent structures.
Businesses that came to market without that foundation are the ones absorbing the structure risk. When a buyer can't get comfortable with the numbers, or sees too much of the business riding on one person, they don't necessarily walk away. They lower the cash at close, push more into an earnout, or ask the owner to roll more equity and stay longer. The multiple may look the same on paper. The outcome for the seller does not.
That gap was already there. This quarter, it got wider.
What This Means Heading Into Q4
Q4 tends to bring two kinds of owners into the conversation.
Closing before year-end
The patterns above are a reminder that the final stretch rewards preparation and patience. Rushing to close against a calendar deadline, in a market where buyers are being more careful, is rarely where sellers gain leverage.
Planning a 2027 process
The timing couldn't be more relevant. The widening gap we saw this quarter is exactly why the 3 to 5 year readiness window matters: it's the period in which an owner can still meaningfully change how a buyer will see the business.
Owners who start preparing now are the ones who will be on the full value side of that gap when they go to market, rather than the side that absorbs the structure.
Where This Read Comes From
This isn't a summary of industry reports or headline data. It reflects what CB Energy is seeing in real time across the active conversations and engagements we're part of every week. It's an on-the-ground view, and it's the reason we publish these pulse posts at all.
If you're starting to think about your own timing, whether that's next year or a few years out, this is a good moment to find out where your business would stand today.