Houlihan Lokey is pleased to present its Digital Infrastructure Industry Update for Q2 2022. We have included topical news stories, transaction announcements, public markets valuation data, and industry insights to help keep you abreast of this dynamic and constantly evolving industry. Given the current volatility in the capital markets, we also have included an update from Houlihan’s Capital Market’s team, the largest and most active non-balance sheet placement agent on Wall Street. The Capital Markets group brings real-time knowledge of and insight into what is achievable in today’s volatile markets based upon recent transactions and other in-process financings. We hope you find this quarterly update to be informative and that it serves as a valuable resource to you. If there is additional content you would find useful for future updates, please don’t hesitate to call or email us with your suggestions.
Accomplishments: Q2 2022
Houlihan Lokey again demonstrated its position as the leading investment banking advisor to digital infrastructure and connectivity companies, having advised on more than 25 transactions totaling approximately $13 billion in transaction value in 2021. The group has been among the most active advisors in the sector in Q2 2022, with numerous new deals announced, and expanded its sector coverage to include the telecom software industry. The Digital Infrastructure team has earned a reputation for providing superior service and achieving outstanding results in M&A advisory, capital raising, restructuring, and valuation. A trusted advisor, the group combines extensive market capabilities with in-depth industry knowledge to help clients maximize shareholder value. The Digital Infrastructure team is part of Houlihan Lokey’s global Technology Group, with more than 200 bankers dedicated to delivering superior results and outstanding service in the TMT sector.
Current Capital Markets Backdrop
The U.S. capital markets are currently challenged with investors focused on recession concerns, inflation, supply chain issues and broader global political and socioeconomic issues. Amid the slowdown and volatility in the syndicated and high yield markets, however, the direct lending market continues to exhibit strength, offering borrowers competitive pricing and terms. − Direct lenders have taken market share from banks, given their ability to provide large commitments, speed and flexibility. Investors are actively looking for high-quality assets in recession-resilient markets. − Digital infrastructure lenders remain highly active and willing to support companies with strong cash flow, predictable revenue streams and management teams with a track record of successful expansion. Please let us know if you’d like to speak with our Capital Markets team about the current financing environment and opportunities in this market.
On May 11, 2022 Logix secured $100 million in capital commitments from Astra and funds managed by O’Connor Capital Solutions to fund key customer-driven growth initiatives, support an accelerated network evolution plan and refinance a portion of its senior debt. Proceeds will be used to support Logix’s core customer segments through network build and cost rationalization programs, including 5G wireless backhaul services, data center support and increased penetration of owned fiber network services throughout the company’s footprint.
