Investors Take Aim at Fiber-Rich Operators | Knowledge Exchange Brief


Lots of opportunities are being created
for broadband providers by consumers insatiable demand for data, new 5G
networks, and the growth in cloud computing. And based on where things are headed we don’t see this trend slowing down anytime soon. Nor do investors. And as a result they have been busy acquiring mid-sized fiber
transport companies at prices that were unthinkable a few years ago. Now that most of the mid-sized companies have been acquired, investors are turning
their attention to smaller and rural broadband providers. For smaller and rural companies who are looking to sell, understanding the landscape and
developing a plan of action can be overwhelming. Therefore it’s important to
understand who the key players are namely large infrastructure funds,
private equity firms, and strategic buyers. It’s also important to know what
it is investors are looking for. Think fiber-rich networks, operations that are close to tier two and tier three cities, and a track record of cash flow generation to
name a few. Having clearly defined goals is also
important. Generally speaking if the company owners are looking to cash out and remove themselves from the business, selling to a strategic buyer might make
sense. Conversely, if they are simply looking to
raise equity capital then partnering with an infrastructure fund might be the
best option. Broadband network valuations are high, and it looks like it will
remain a seller’s market for the foreseeable future. To maximize value,
prospective sellers should do their due diligence talking to trusted advisors
when they are building their deal team. To find out more, read my report on
CoBank com.

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