Telecom Business Services: Summer 2026 Report

The FOCUS Telecom Business Services Index (TBSI) enjoyed a second straight reporting period of both delivering a double-digit return and outperforming the broader indices. The TBSI gained 28.2% in the past three months, which exceeded the 14.9% return of the S&P 500 and the 21.4% return of the NASDAQ by a wide margin. The TBSI also remains well above the broader indices when measured over the 12-month period.The TBSI is up 41.8% over this time frame, as compared to gains in the S&P 500 and NASDAQ of 20.9% and 28.7%, respectively. Sector multiples also increased meaningfully over the past year. The revenue multiple for the TBSI increased from 1.1x a year ago to 1.4x at the end of the current reporting period, while the EBITDA multiple increased from 11.2x to 13.4x over the same time frame.

Both of the TBSI’s subsectors turned in strong performances in our summer reporting period. The Distributors and Logistics Services sub sector rebounded from a double-digit loss in our last reporting period to post a strong gain of 22.8%. Gains were broad-based as every single company in the index had a double-digit gain. However, the 81.8% gain at Insight made it far and away the sub sector’s best performer. The gains at Insight were driven by a combination of improved margins and a change in company leadership. Despite this period’s strong performance, the Distributors and Logistics Services sub sector is still down more than 15% for the full year period. CDW and Insight were the main drags on the index over the past year. Sub sector multiples closed out the period at 0.9x revenue and 10.7x EBITDA. Both of these are lower than year-ago multiples of 1.1x revenue and 13.0x EBITDA.

The Engineering and Construction sub sector had an even stronger performance with a three-month gain of 31.0%. Gains in this sub sector were also broad-based, but Dycom and MasTec were the strongest performers with gains of 49.2% and 29.3%, respectively. The sub sector has also more than doubled over the past year with a gain of 115.3%. Once again, Dycom (up 106.9%) and MasTec (up 144.1%) led the charge. Multiples also showed a significant uptick over the past year with the sub sector revenue multiple jumping from 1.1x to 2.0x and the EBITDA multiple increasing from 9.4x to 15.4x. Finally, we noted that the sub sector had its first IPO in recent memory as ITG successfully went public on June 30. ITG did not begin trading in time for us to include it in the current report, but we will incorporate the company into our quarterly starting this fall.

The Telecom Business Services sector saw a surge in M&A activity in the three months of our summer reporting period. We counted a total of 26 transactions over this time frame, which hearkens back to a level of activity that we last saw back in 2022.Total announced transaction dollar value was also a solid but not spectacular $586.6 million. For year-to-date 2026, we are now at 42 deals with a total announced transaction dollar value of $586.6 million. This means that the level of M&A activity is currently running at a similar pace to what we saw in 2025. The big question is if the momentum from this period will continue into the back half of the year and drive a meaningful increase in M&A activity in 2026.

Activity in the Telecom Engineering and Construction sub sector was responsible for the uptick in M&A activity as it accounted for 19 of our 26 transactions. This included Dycom’s acquisition of National Technology Integrators for $275 million to further its exposure to the data center space. In another large data center-related transaction with no publicly announced transaction value, Olympus Partners acquired Network Connex.On the traditional Telecom front, European company Netel announced that it would be acquired by Infrea for $168.3 million. Not surprisingly, we also saw several transactions for firms in the fiber industry including engineering firms Hexad Solutions and Layton Surveys (Acquired by Alpine Infrastructure Partners and CCI Systems, respectively) and construction firms Blue Jay Communications and Isbell Construction (acquired by STG Communication Services and Electricom, respectively). Finally, we did note some deals in the wireless sector with Centerline’s acquisition of NEC and the Patriot Towers acquisition of Transwave Communications Systems. We will be keeping a close eye on wireless M&A activity to see if it is finally beginning to recover from the dramatic decline that started back in 2023.

The Distributors and Logistics Services sub sector had significantly less activity with only seven transactions for the period. Three of these involved IT asset disposition companies, including the Ivy Technology acquisition of ISP Tek Services. There were also two acquisitions of repair and refurbishing companies as Other World Computing acquired PowerON Services and Verdant Solutions acquired CSAT. The sub sector’s final two transactions both involved distribution businesses.

There were four transactions with announced multiples this period. The period’s largest transaction, Dycom’s acquisition of National Technology Integrators, also had the highest revenue multiple at 1.6x. Hexatronic Group’s acquisition of Superior Fiber & Data Services was also in the data center space, but had a significantly lower revenue multiple of 0.8x as well as an EBITDA multiple of 6.4x. The Infrea acquisition of Netel had a relatively low revenue multiple at 0.6x. However, the high EBITDA multiple of 36.4x reflected low margins and the expectation by the acquirer that it could significantly improve performance.Finally, the Cloudpoint Technology Berhad acquisition of Cx One had a revenue multiple of 0.9x.