Professionals from all parts of the telecom industry are converging on Chicago this week to stroll the carpet at NXTcomm for a view of what's new, innovative and for sale this year, including hardware, software and, well, the companies themselves. This year's big summer trade show will likely have more service providers and suppliers in attendance than the clowns and jugglers of years past. But one group that is bound to be in attendance at NXTcomm is the private equity set, which has taken more than a passing interest in telecom lately.
Last month, for example, TPG Capital and Goldman Sachs Capital Partners bought Alltel for $27.5 billion. A few days ago, Avaya was acquired by private equity player Silver Lake for $8.2 billion, reportedly out-bidding Nortel Networks. And just yesterday (yes, Sunday), in response to media reports, Israeli equipment vendor ECI Telecom acknowledged it was in acquisition talks with an investment group called Swarth Investments (though no deal had been reached).
With plenty of small and mid-sized suppliers left in a market increasingly in the shadow of colossi, private equity players will no doubt be shopping the aisles of NXTcomm searching for companies ripe for acquisition. Nearly every equipment vendor you can name is boasting capacity upgrades and expanded gear built to meet a growing demand for more bandwidth. Flush with the traffic of new services, networking companies have plumped up like hogs at the fair. Chicago, which once had a reputation for serving up hogs to the world, is a perfect locale for the event.