Due Diligence for Global Investor Planning an International Fiber Operator

Challenge

The client was a consortium of global infrastructure investors seeking to expand their portfolio of telecommunications assets.

The project aimed to support our client in the acquisition of a global fiber operator, with a footprint of metro and long-haul network assets across continents. The target’s client portfolio represented a mixture of medium to large-sized business customers, blue-chip organizations, carriers, and mobile operators.

Solution

A core component of the commercial due diligence was a detailed metro-by-metro geospatial analysis to assess the target’s addressable market, reflecting a mixture of quantitative and qualitative inputs, to assess the Target’s historical and future bookings potential at an individual market level:

• Geographies: Bottom-up geospatial analyses across 100s of individual metro regions to determine the proximity of potential customers to the target’s network and levels of infrastructure overbuild from competitors.
• Products: Analysis of target’s product portfolio and revenue mix by product, which reflected changing bandwidth needs of target’s customers.
• Customers: Current contracts and future bookings are analyzed to identify top customers and industry concentrations.
• Pricing: Target’s offerings assessments aim to identify untapped pricing potential, particularly in areas with low levels of competing infrastructures.
• Go-to-market and sales organization strategy: Assessment of the target’s go-to-market strategy and how this needs to be reflected in the structure and ramp-up of the sales organization, with a focus on exploiting the regional market potential.

Results

Altman Solon confirmed investment hypotheses and developed a bottom-up granular market and revenue model for the target company across customers and product segments with a range of scenarios and forecasts covering more than 10 years. The revenue plan was supported with details on specific metros where the existing organization was underperforming via its fair share, and likewise where there was potential for the target to exceed its fair share (based on a limited product offering from competitors). In terms of execution, Altman Solon provided details on the scope of the sales organization (and corresponding headcount build-up and reward structure) to support a more regionally focused sales strategy.

Altman Solon also supported the consortium of potential buyers in their discussions with their Limited Partners and lenders, including full-day sessions with Limited Partners and potential syndication partners.