PE-backed telecom deals are on the rise, with Centre, Crestview, CDPQ and Grain among recent buyers

PE-backed deals are a growing force in the media and telecommunications sector, with a slew of transactions announced recently.

The telecom sector appears primed for these deals in 2022, thanks to rising demand for podcasts, video games, mobile apps, cloud computing, online gambling, artificial intelligence, and augmented and virtual reality software. And as media and telecom companies reevaluate their business models and sell off non-core assets, PwC expects to see “PE firms continue to be major players in the sector in the coming years.”

As a sign of growth, private equity accounted for 37 percent of all telecom deals in 2021, up from 24 percent in 2018, according to a recent report from PwC. Last year’s deals represented a record $104 billion of announced value.

Investment in broadband infrastructure is expected to accelerate, especially now that Internet providers have agreed to help offer high-speed access to millions of unconnected households through the bipartisan infrastructure law.

Among the private equity firms announcing recent deals is Centre Partners. Last week, the mid-market PE firm merged two AT&T retailers into the rebranded Alliance Mobile.

Alliance Mobile comes with a footprint of over 160 stores in 11 states in the Midwest, Mid-Atlantic and Southeast regions, in a deal that has been described in a press statement by the company as an “aggressive and strategic growth strategy in route to establishing the leading growth platform within the AT&T dealer network” and an opportunity to scale up operations.

Congruex, backed by Crestview Partners, bought two telecom services providers, marking the 17th and 18th acquisitions made by Congruex since Crestview’s initial investment back in 2017. Based in Dallas, Tower Engineering focuses on wireless tower infrastructure, leveraging its proprietary software and analytical tools that help its customers achieve substantial cost savings. Sorensen Companies, which is based in Syracuse, Utah, provides fiber and wireless infrastructure such as aerial and underground fiber optic systems and outside plant OSP construction.

Canadian based Caisse de dépôt et placement du Québec (CDPQ), is another PE firm that announced a deal last week, committing $150 million to Everstream Solutions, a Cleveland-based business-only fiber telecommunications business. Everstream has an all-fiber network that adds up to 27,000 miles and has more than 5,000 on–net locations across 10 states.

CDPQ’s executive vice president and head of fixed income, Marc Cormier, said there is crucial need to meet rising demand to expand digital infrastructure across rural and urban zones to enable companies to compete better in today’s economy. “We are pleased, along with an esteemed group of lenders, to support Everstream’s strategy to expand in its target markets and densify its high–quality network to provide even more fiber services to US businesses.”

Late last month, Network Wireless Solutions, which is backed by Grain Management (a Washington, DC-based based private equity firm that invests in the communications sector), acquired JF Tech, a Blainville, Quebec-based manufacturing and distribution company that offers products and services to the wireless and wireline industry.

PE Hub expects to see much more activity in PE-backed telecom deals in the weeks and months ahead. Reach out and tell me about the telecom deals you’re working on. My email address is: obey.m@peimedia.com