Americas Fiber M&A Playbook: A Practical Guide for Buyers and Sellers

More than 1,900 small- and mid-size fiber companies compete in an increasingly fragmented market that grapples with high capital costs, network deployment difficulties, and slowing adoption rates. While some of these 1,900 are co-ops or government-related organizations not looking to turn a profit, we believe the industry is saturated with competitors and poised for significant consolidation in the upcoming years. Roughly 400 to 500 of these smaller companies will be potential M&A targets.

We base our findings on qualitative and quantitative primary research conducted with industry experts and consumers. For the former cohort, we surveyed 60 fiber company leaders to investigate their perspectives on current industry challenges and worries, alongside one-on-one conversations with investors and private equity stakeholders. For the latter, we surveyed 1,000 U.S. residents across demographics on their internet opinions and pain points, in partnership with MBA students at the McCombs School of Business at the University of Texas at Austin.

As M&A activity heats up, industry leaders will aim to expand their footprint by swallowing smaller operators, incorporating their tech infrastructure and customer bases for cost-effective growth.

Meanwhile, smaller fiber companies are recognizing the level of resources required to effectively monetize network assets and build a commercial engine. Some will be better off selling part or all of their business to focus on a finite set of priorities.

Buyer success will depend on how efficiently they acquire and integrate fiber assets. There are many targets and a finite number of acquisition platforms—speed-to-value will be critical. True assimilation—where acquired companies fully adopt the buyer’s culture, practices, and norms—is needed to create something greater than the sum of its parts. For sellers, navigating the consolidation landscape necessitates strategic portfolio optimization, factoring in cash runways. This will often mean a shift from a 'build-at-all-costs' mentality to profitability and monetization initiatives, with a focus on specific markets to avoid selling in distress.