Mergers and Acquisitions

Merger & Acquisition Valuation

  • So you want to invest in a small MSO or ILEC; how do you know the real value? Financial records often can describe a different story than what is found in the field, the network electronics, cables on the poles, products in the billing system, or in customer acquisition and installation processes. Such differences result more from a lack of internal communication and terminology used between the financial and operational sides of a company, than from any deliberate misrepresentation or omission. While a short term investment can relegate itself to evaluation of just the financial strengths or weaknesses of a prospect, longer term investments are often to be made or lost in the less tangible valuations.
  • Is the recent rise / fall in revenues the result of development of a new product or market segment, or is it a flash of a momentary price change, shifting competition or another temporary factor?
  • What are the longevities of the electronics used? Do they need replacing? What is the SG&A component needed to support their architecture? Are they too innovative?
  • What are the demographics of their service territory? What types of passing’s? What types of RGUs? Where do they not have network? What growth potentials are they primed and ready for?

This session covers assessment and valuation of a prospective telecommunications company (or product) on behalf of a purchaser, investor or other requesting party. These may be as part of a larger assessment team, or performed independently. As always, the decision and responsibilities for an investment ride with the purchaser; these sessions simply act to feed more information from a tactical, 3rd party perspective.

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In conjunction with this site, Lone Star Broadband seeks to enable Multiple System Operators (MSO), Independent Local Exchange Carriers (ILECs) and other aspiring local service providers to launch products and services targeted to Commercial and Enterprise customers.

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