Target Identification | Market Due Diligence | Comparable Valuation

Business need

  • A US-based top 25 accounting and advisory firm wanted to conduct a detailed analysis of the telecom infra construction and maintenance sector and identify investment opportunities.
  • It engaged RocSearch to analyse the market size, structure, key trends, outlook, competitive landscape and the prevailing valuation multiples.
  • It wanted to identify investment targets that conduct Construction & Maintenance of Communication Lines, Aerial & Underground Communication Cable Laying and Telecom Engineering Consultancies.

To assess comparable valuations and investment opportunities in the telecom infrastructure sector in the US.

The client outlined three key reasons for selecting RocSearch:

  • Our proven investment research and advisory capabilities.
  • Our experience and understanding of the telecom carrier and communication infrastructure sector.
  • Our unique RocEye target identification approach with a proven record of identifying niche opportunities.

Approach and Methodology

  • Our investment advisory team sized the wireless telecom tower construction market at over $7bn with a forecasted growth rate of 3% for the next 5 years. We mapped out the key market segments and the trends driving this sector and potential challenges for the incumbents. The market analysis also included a summary of the competitive landscape, benchmarking of the leading players, their focus areas and trading & transaction multiples prevailing in the sector.

We analysed the US Telecom Infra sector capturing the size, trends, competitive landscape and comparable valuation. A universe of 3,600+ companies was screened to shortlist & profile 50 investment-worthy targets

  • We deployed our comprehensive RocEye approach to screen the target universe and identified Telecom Infrastructure conducting (a) Construction & Maintenance of Communication Infrastructure (b) Aerial & Underground Communication Cabling; or (c) Telecom Engineering Consultancies in the US.
  • Having screened a universe of 3,600+ businesses, we shortlisted and profiled 50 investment worthy targets that had revenue between $10mn – $200mn, or between 30 to 200 employees and ideally with a 10% EBITDA margin.

Business Outcomes

  • The study provided a detailed analysis of the US telecom infrastructure sector and a pipeline of actionable platform target opportunities. The project led to savings of over 300 hours of internal bandwidth for the client.
  • The client used the market analysis and comparable valuation as part of its due-diligence of the sector.
  • The client leveraged the pipeline of opportunities to advise its end client on potential M&A opportunities and for conducting further commercial and financial diligence on them.

The client successfully closed its deal advisory mandate with a leading network development, telecom engineering, and services company in the US, supporting its growth strategy.

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