Cincinnati Bell Acquired: IT Services Provider Valuations
Ahead of the Brookfield deal, Cincinnati Bell had predicted annual revenues of $1.515 million to $1.575 million within a November 2019 earnings disclosure. The same statement mentioned an adjusted EBITDA target of $400 million to $410 million.Cincinnati Bell's buyout valuation is typical for IT services providers, which have been selling for 4X to 8X annual EBITDA -- a fairly wide range that's based on such variables as overall size, growth rate, vertical market expertise, intellectual property, customer churn, customer diversification and more, ChannelE2E estimates.Some IT service providers have been fetching as much as 10X annual EBITDA if they have truly unique intellectual property (IP) -- particularly in the SaaS, cloud or automation areas -- plus rapidly growing profits coupled with low churn, ChannelE2E's reporting indicates.Cincinnati Bell Acquired: Executive Perspectives
"With Brookfield Infrastructure's support, we will be better positioned to deliver next generation, integrated communications for our customers through an expanded fiber network. Brookfield Infrastructure provides strong industry expertise with a proven track record of investment in critical data service and infrastructure. The financial, management, and other resources made available to Cincinnati Bell through the acquisition will enhance our networks and services to the benefit of our customers in Hawaii, Ohio, Kentucky, and Indiana, and across the nation."
"This investment represents an opportunity for Brookfield Infrastructure to acquire a great franchise and leading fiber network operator in North America. We are excited to leverage our operating expertise to work with the company's management team as it completes its industry-leading fiber optic rollout plan. Cincinnati Bell is a great addition to our data infrastructure portfolio and we expect it will contribute strong utility-like cash flows with predictable growth."
