Broadband & fibre deals to flourish

In Europe, fixed broadband and fibre deals will continue to contribute to a significant portion of transactions within the wider telecoms sector, whether it is through capex financing for new rollout or M&A. A great deal of new buyers have been showing increasing interest in the sector, which provides low risk, steady revenues, driven by high demand to answer the need for data services.

Consistently, we have seen many examples of private equity firms, infrastructure funds, institutional investors and some US strategic players all bidding for such assets, which has led to high valuation multiples, according to TMT Finance data. Telcos such as Telefonica or TIM are thought to be mulling divestments of their fixed-line networks, whereas several funds will be looking at exits of fibre wholesale businesses after implementing successful buy-and-build strategies and scale-ups.

However, investors may have to be wary of processes where, after a lengthy tender, assets eventually end up effectively sitting with the existing owner (such as Ufinet for Cinven, and Broadnet for EQT). High multiples in the sector, around 12 times the EBITDA, have also made competition very intense, often making it challenging and expensive to acquire premium assets.

Other News

Published on 18.10.2018
Published on 18.10.2018
Published on 18.10.2018
Published on 18.10.2018