Telecom Business Services: Spring 2026 Report

After falling into the red in our Winter 2025 report, the FOCUS Telecom Business Services Index (TBSI) rebounded strongly with a gain of 10.0% in the first three months of 2026. This was made even more impressive by the fact that the broader market faced significant challenges. The S&P 500 dropped 4.6% over the past three months, while the NASDAQ was down even more sharply with a loss of 7.1%. The TBSI is also up 34.0% compared to this same time last year.Once again, this outperformed both the 16.3% gain in the S&P 500 and the 24.8% gain in the NASDAQ by a wide margin.Sector multiples also increased from year-ago levels. The TBSI revenue multiple increased from 0.9x to 1.2x, while the EBITDA multiple jumped from 9.7x to 11.2x.

The 26.3% gain in the Engineering and Construction sub sector was the sole reason for the TBSI’s outperformance over these past three months. In turn, the sole reason for the large gain in the Engineering and Construction sub sector was a 48.0% gain at MasTec. MasTec’s gains were due to a combination of a number of factors including a strong Q4 2025 earnings report, a record backlog heading into 2026 and the Company’s traction in the data center space. All of the other companies in the sub sector had either modest gains or losses for the period. The revenue multiple for the Engineering and Construction sub sector more than doubled over the past year, going from 0.8x to 1.7x. The sub sector EBITDA multiple also increased from 7.1x a year ago to 12.8x currently. The picture was not nearly as rosy for the Distributors and Logistics Services sub sector. This sub sector suffered a second straight reporting period with a double-digit loss, with all of the companies in the index except PC Connection trading in negative territory for the past three months. The sub sector is also down more than 25% over the past year. Sub sector multiples closed out the period at 0.8x revenue and 9.2x EBITDA. Both of these are meaningfully lower than year-ago multiples of 1.0x revenue and 12.4x EBITDA.

The Telecom Business Services sector was off to a slow start for M&A in 2026 with only 15 total transactions over the past three months. None of these deals had an announced transaction dollar value. While there is still a lot of time left in the year, the sector will need to play some catch up if it is going to meet or exceed its totals from 2025.

In a reversal from what we saw in our Winter report, it was the Distributors and Logistics Services sub sector that accounted for the vast majority of M&A activity. In fact, this sub sector accounted for 12 of the period’s 15 transactions.Companies that provide refurbished products and/or repair and maintenance services were popular targets.Gemspring Capital established a new portfolio company with its acquisition of mobile equipment management company Technology Recovery Group. At the other end of the spectrum, Pfingsten Partners exited its Tempest Telecom Solutions platform in a sale to Ivy Technology. Tempest provides refurbished equipment and repair services primarily to telecom network operators. We also saw several transactions involving traditional value added distributors. In particular, we noted the acquisition of Verinext by Arctiq. In contrast to its sector counterpart, the Telecom Engineering and Construction sub sector was largely dormant with only three transactions for the period. System One acquired Cypress Consulting, a consulting firm specializing in data centers and networks. In addition, Norwegian firm NetNordic purchased Itectra. Itectra designs and maintains critical IT infrastructure, including data centers. In yet another data center-related transaction in the Nordic region, Nimlas Finalnd acquired data center installation services company DT Systems.

There were no transactions with announced multiples this period.