Unified Communications - Market Update
In an article for UCToday, Ian Guilfoyle takes a closer look at the Unified Communications sector.
Unified Communications has experienced high levels of M&A activity in recent years with strong interest from private equity, attracted by the recurring nature of revenue, asset-light business model and in-built resiliency linked to digital transformation, contributing to price inflation.
Arrowpoint Advisory’s analysis shows that over the last three years, the most active buyers in the sector have been private equity backed buy-and-build platforms seeking to consolidate the market. Additionally, when determining the value of a business within the unified communications sector the research shows that acquirer’s value organic growth, recurring revenue and next-gen products above all things.
Ian Guilfoyle, Director at Arrowpoint Advisory, comments: “As the world becomes increasingly digital, we’ve seen increasing M&A activity within the unified communications sector. The pandemic has underscored the importance of these offerings to every business, big or small. This has manifested itself in the robust trading performance of most unified communications providers through lockdown. This resiliency coupled with multiple private equity platforms implementing buy-and-build strategies, supported by record levels of dry powder and historically low interest rates, is starting to drive price inflation in the sector. Overall, the market outlook for unified communications looks very promising.”
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