Traffic lights with abstract images of vehicle headlights and taillights as a background.

Looking Down the Road in Traffic Management

Baird’s Takeaways from 2025’s ATSSA Annual Convention

Ardis Tabb and Brad Page of Baird’s Facility, Industrial, Residential and Environmental Services (FIRE) team attended the 55th annual American Traffic Safety Services Association (ATSSA) Convention and Traffic Expo in Orlando. We had the opportunity to connect with traffic management executives and investors throughout the conference, discussing the latest market trends and what could be next in the market.

Here are our team’s top takeaways from our discussions and the conference sessions and insights on the current state of the traffic management industry:

Appetite for M&A is Growing on All Fronts

The traffic management industry is seeing increased interest from institutional investors, and this year’s ATSSA conference saw noticeably more private equity investors and advisors in attendance than previous years. As for M&A activity in the space, momentum for platform assets and add-ons continues, as both are trading at attractive valuations. Consolidation within traffic management also continues as larger, well-capitalized companies seek to broaden their footprints and service offerings and capture share through acquisitions. 

Meanwhile, smaller platforms are seeking to accelerate their growth via M&A while larger businesses are looking to balance M&A and organic growth. In addition, more businesses are weighing the merits of adjusting their end market and/or service mix to become stronger and more durable. 

Further, the topic of consolidation among consolidators is gaining steam amongst industry participants, and there’s been evidence of this taking place. The benefits of scale are being realized with larger platforms and bringing together proven consolidators has natural benefits.

As the sector’s attractive characteristics have become more well-known, competition for traffic management assets and associated M&A volume have both increased. Among the market’s most attractive traits are:

  • Demonstrated success from historical platform exits
  • Provides a path to buy-and-build strategies, due to market fragmentation
  • Mission-critical nature of the service offering and its highly reoccurring nature
  • Large market size and tremendous white space opportunity

Organic Growth Strategies are Top-of-Mind

As larger businesses add increased scale from successful M&A programs, they are looking more at pulling organic growth levers to drive sustainable growth and profitability. There are fewer M&A targets of scale that “move the needle” for these larger businesses, so organic growth has become of greater importance.  Also, competition for the high-quality businesses and rising valuations from increased competition have driven the desire for more organic growth for businesses large and small.  

Increased diversification has become a topic du jour for platforms of all sizes.  Diversifying services and/or end markets not only helps businesses become stronger and more durable but also optimizes exit alternatives.  Broader services and/or end markets increases the market size and available acquisition targets, which is increasingly beneficial as competition for add-ons has heightened.

Service Expansion

Expansion of traffic management services is usually associated with enabling companies to cross-sell new services, enhance their value proposition and drive better margins. An additional benefit noted by some industry players is an expansion of the total addressable market (TAM), which is particularly valuable to larger, scaled assets that have leading market shares in their respective markets and are seeking new avenues for growth.

The most common path to an expanded TAM is entering service lines that are a natural extension of existing services and markets served, as companies can sell into existing customers, cross-train existing labor and leverage their established brand with familiar customers. However, some businesses are exploring new service lines that would take them into new end markets. Regardless, potential channel conflicts with key partners (e.g., general contractors, subcontractors, etc.) are considered when making these service line expansion decisions.

Customers Seek Out Technology, But Human Touch Remains Essential

Technology is playing an increasingly central role in the traffic management sector, helping to facilitate safer work zones, create efficiencies and capture critical data. End-customers look to have technology solutions utilized on their jobs to increase safety and productivity, as well as improve access to critical data that can later be monetized. That said, key sector technology such as smart work zones, intelligent transportation systems (ITS) and Automated Flagger Assistance Devices (AFADs) still require human labor for their set up, installation, and operation. Thus, while technology has absolutely contributed to the sector’s overall growth, humans remain essential to traffic management functions. 

Globalization Increasing As Players Drawn to Attractive Tailwinds

The global traffic management market is growing and there are several developed markets across the globe (e.g., APAC, Europe, and North America) with similarities in service delivery, customer purchasing criteria and market dynamics, making these markets prime targets for private equity buyers and scaled providers of other nations. European players have entered the North American market drawn by its attractive size and growth, sustainable growth tailwinds as well as the players’ ability to leverage their operational expertise.

Interested in learning more? Connect with Baird Global Investment Banking