Industry Report: Telecom Business Services Q3 2025 [FOCUS]

Key Report Highlights

• M&A Activity Remains Robust Despite Lower Disclosed Deal Value
  FOCUS tracked 26 telecom business services deals in Q3 2025, keeping pace with elevated 2025 deal volume. However, the total disclosed transaction value for the quarter was just $23.3 million, due to the absence of announced values for several large transactions. Notable deals included Service Express’ acquisition of Park Place Technologies and ITG’s $22 million bankruptcy purchase of Tilson Technology assets.
• Engineering and Construction Subsector Sees Strong Gains
  Engineering and Construction companies posted another quarter of strong performance, rising 20.4% in Q3. This marks a 54.7% year-over-year gain, far outperforming the broader market. Leading the rally were Dycom (+19.4%) and MasTec (+24.9%), as demand for fiber buildouts and 5G-related infrastructure remains elevated. EBITDA multiples in this segment increased to 10.5x, up from 8.1x a year ago.
• Distributors and Logistics Segment Faces Continued Pressure
  In stark contrast, the Distributors and Logistics Services subsector declined 11.0% in Q3 and is now down 31.9% year-over-year. All constituent stocks posted negative returns, with CDW and Insight suffering double-digit losses. EBITDA multiples fell from 16.4x to 11.8x, while revenue multiples dropped from 1.4x to 1.0x, reflecting margin compression and limited demand visibility.
• Valuation Multiples Show Divergence Between Sub-Sectors
  As of Q3 2025, the Telecom Business Services Index trades at 1.1x revenue and 11.2x EBITDA, down from 1.2x and 12.3x, respectively, a year prior. Engineering and Construction trades at a higher 1.3x revenue multiple, signaling strong investor appetite, while Distributors and Logistics has retreated to a 1.0x multiple. This divergence suggests investors are rewarding infrastructure-linked growth over legacy distribution models.
• Platform Buyers Pursue Consolidation Across Fiber and Wireless Segments
  Despite macro headwinds, buyers remain active in fiber and wireless-focused niches. Circet Groupe acquired both SourceOne and Gemini Communications, expanding fiber engineering and construction capabilities, while FBR made two acquisitions—RTS Associates and Johnson Communications—to scale its engineering services. These deals reinforce ongoing consolidation among regional infrastructure service providers.

FOCUS Investment Banking is a national middle market investment bank providing M&A advisory, capital raising, and corporate finance services to privately held companies. Founded over 40 years ago, the firm specializes in advising lower middle market businesses—typically with $5 million to $300 million in revenue—across a broad range of industries including aerospace & defense, healthcare, technology, manufacturing, business services, and automotive.

With a team of seasoned professionals who bring deep operating and transactional experience, FOCUS delivers partner-led, tailored guidance on sell-side and buy-side M&A, growth capital, exit planning, and valuation services. The firm combines industry expertise with global reach through its affiliation with M&A Worldwide, offering access to international buyers and investors.

Headquartered in Washington, D.C., FOCUS also maintains offices in Atlanta, Chicago, Los Angeles, Miami, and Dallas. Securities transactions are conducted through FOCUS Securities LLC, member FINRA and SIPC.

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