We met the Q Advisors team late last year. After an hour conversation with the team, it was clear that they had a great command of the managed services sector and the relevant players. They listened to our objectives, established the sale price we could expect and identified a projected buyer quickly. It was a true testament to the experience necessary in an M&A transaction. Q Advisors' deep team worked with us hand-in-hand on an accelerated basis to get Broadsmart an industry-leading exit multiple from a partner that we are excited to be working with as part of their senior management team. We look forward to working with Q Advisors in the future.
Hosted communications and related managed services continue to be the fastest growing segments within telecom, with small and medium-size enterprises (SMEs) showing a clear preference for having “one back to pat” for all of their IT, security, data, and communications needs, including cloud-based services.
While SMEs and distributed enterprises have been early adopters of cloud-based services, large enterprises have begun to migrate their complex communications systems to the cloud, greatly increasing the addressable market. Many of these enterprises are deploying a hybrid form of cloud communications, with legacy private branch exchanges (PBX) merely serving as backup servers.
Traditional hosted VoIP continues to grow rapidly, with the number of hosted seats expected to continue to grow in both the U.S. and abroad. However, hosted VoIP is increasingly viewed as merely one part of a larger, comprehensive unified communications (UC) bundle, which includes elements of mobility, messaging, collaboration, voice, and customer relationship management (CRM). Further, emerging UC technologies such as cloud computing and virtual desktop software platforms are experiencing rapid uptake by SMEs and larger enterprises alike, increasing the competition with existing hosted platforms.
Q Advisors has established itself as one of the most active managed and cloud-based services investment banks in the industry, based on the number of active clients and deals closed. We have longstanding relationships with key players and have completed successful transactions with industry leaders such as Arkadin, Broadvox, Earthlink, Masergy, One Source Networks, Vonage, West, and many other strategic and financial players.
Q Advisors is a member of the Cloud Communications Association (CCA) and a frequent speaker on M&A and financing trends at the CCA meetings and other industry trade shows.
Businesses are increasingly recognizing the advantages of migrating contact center infrastructure and services to the cloud as they seek competitive advantages in customer satisfaction and retention, while still controlling overall costs.
The current cloud contact solution landscape remains highly fragmented and underserved, creating a number of near- and medium-term opportunities for investors and operators to participate in the anticipated growth.
Q Advisors’ in-depth knowledge of key trends and industry players makes us uniquely qualified to assist legacy vendors with transitioning to a cloud-based offering through strategic acquisitions. We are also a leading industry partner in enabling emerging UCaaS and managed service providers to create leading, end-to-end cloud contact center solutions through mergers and acquisitions (M&A) and/or financing transactions.
Leveraging the growing acceptance of cloud services and shared platform technology, infrastructure as a service (IaaS) offers on-demand, highly scalable computing resources over the Internet, with storage and networking capabilities owned and hosted by a service provider.
IaaS has dramatically increased in popularity because it enables companies to access hardware, software, servers, storage capacity, and other infrastructure components via a hosted or on-demand environment. Tasks such as administration, maintenance, backup, upgrades, and management are generally outsourced to the IaaS service provider, resulting in an enterprise having access to highly scalable resources on an economical pay-as-you-go basis.
Integrated collaboration and conferencing services are fundamental to any successful business as employees, customers, suppliers, and managers seek to maximize the ease and efficiency of daily interaction. Constraints currently limiting collaboration range from fluctuating workforce needs and increased risk of technology obsolescence to the lack of available capital budgets to support the demands of an increasingly mobile workforce.
Q Advisors has a long-established track record of success in servicing the corporate finance and M&A advisory needs of companies within the collaboration and conferencing sectors. As managed corporate networks and available capacity to support interactivity continue to increase, enterprises and consumers are rapidly adopting tools and applications to enable effective collaboration. These primarily cloud-based resources will support meaningful growth and activity for industry participants.
Q Advisors believes there are several key areas of opportunity:
Global service providers are faced with delivering the ever-increasing network capacity required to address the exponential growth of data consumption. At the same time, they are also combating over-the-top applications that threaten their network-centric recurring revenue streams. The rise in global IP-based traffic continues to drive the demand for improving communications networks, technologies, and services, and carriers must now offer more complex, varied cloud and managed services, managing the end-users’ wide-area network and mobile and cloud-based applications, regardless of access methodology.
Key segments of focus for Q Advisors include the following:
Wireless services and mobile-enabling infrastructure
Q Advisors has a long track record of assisting global network operators and communications infrastructure providers. We also have an extensive number of relationships with leading private equity firms, growth capital providers, and global vendors. Whether a client is a wireless, fiber-based, or wireline-based service provider, an emerging software vendor providing a disruptive technology, or an investor seeking to monetize assets such as wireless spectrum, Q Advisors will provide strategic guidance and insight that results in successful outcomes.
With the advent of near-ubiquitous data and voice connectivity, the mobile channel has emerged as an essential means of interactivity for both enterprise and consumer-facing organizations. For enterprises, the primary goal of utilizing mobile technologies revolves around improving sales, operations, and general employee productivity by enabling universal, real-time access to both internal and external information. Consumer-facing organizations and brands are increasingly utilizing mobile services and applications to improve direct-to-consumer engagement. Across the landscape, Q Advisors believes there are a number of underlying trends that will result in opportunities within the mobility services sector:
The combination of broadband-based connectivity with the increasing availability and complexity of connected devices is leading to widespread market adoption of IoT-based technologies and applications. Broadly speaking, the Internet of Things is a scenario in which physical objects are provided with unique identifiers and the ability to transfer data over a network without requiring active human-to-human or human-to-computer interaction. The ability to connect any device with an on/off switch to the Internet encompasses everything from cell phones, household items and appliances to wearable devices and broad-based industrial components. Q Advisors believes that opportunities within the IoT sector will span multiple sub-segments of the market, including the following:
Incorporating aspects of media, technology, and marketing, digital media and ad tech represent a dynamic sector experiencing rapid growth and evolving ecosystems. While digital media overall continues to sustain double-digit growth rates, both advertisers and technology providers are seeking to capture the anticipated rapid growth in mobile advertising through innovation, geographic expansion, and disruptive technology.
Software and media companies are attempting to unify advertising and technology through the introduction of data-centric capabilities, including attribution, location-based interaction, payment solutions, analytics, data management platforms (DMPs), and demand-side platforms (DSPs). A key challenge/opportunity being addressed by a number of industry players is to coordinate consumer activity across a number of devices and formats.
Q Advisors offers our clients expertise and insight into this industry's dynamic business landscape. Our team has more than a decade of experience advising companies in the sector on mergers, acquisitions, recapitalizations, and capital raises, and the firm has worked on a wide range of domestic and cross-border transactions.