End-market Diversification: As the sector evolves, companies are required to look into new end markets (e.g., energy, EV charging stations, district heating) to counterbalance the potential future decline in fiber roll-out activity. Given demand for fiber services and equipment is currently strong, there is limited desire nor capacity to organically venture into new end markets. Add-on mergers and acquisitions (M&A) therefore is a key tool to bring new competencies in-house next to customer relationships.

Acquisition Hires: Engineering, planning and construction companies’ growth is limited by a lack of qualified personnel. Certain tasks, such as splicing, also require specialized personnel. Acquisitions are a key enabler to scaling capabilities in a timely fashion while demand is strong.

Succession Issues: Many smaller, owner-led firms are looking to become part of a larger organization in order to secure the future of the business and monetize the value of the company they built.

Consolidation in Fiber Networks: The rise of interest and construction costs, supply issues, insolvencies and fiber overbuild, among others, have impacted the fiber sector in Germany. In addition to continued organic fiber rollouts, we expect a wave of consolidation in the fiber network sector.