Telecomm Fiber Optic Infrastructure Contracting Company

A company that provides installation, troubleshooting, maintenance, and auditing of fiber optic and cable systems for telecom systems. The firm had just been awarded a massive long-term contract with a giant in the telecom industry. This contract led to a lot of uncertainty as many buyers won’t ascribe much value to future earnings. However, we felt that the business could attract strategic buyers who would benefit from creating economies of scale and, therefore, be willing to pay a much higher multiple. We received robust interest from the start and had multiple offers from both the Private Equity community and strategic buyers within the first couple of weeks. Ultimately, we went with a strategic buyer and many negotiations, and an agreement was reached to obtain consent for assignment from its primary customer, representing nearly 75% of total revenues. The deal was structured as an 80% cash at close and 20% equity rollover, and we got a very healthy 4.8x multiple of Cash flow. The business was sold in less than 6 months from when the owner first contacted us to inquire about selling their company.