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Massachusetts-based Lghtower Fiber Networks and Fibertech Networks will merge in a $1.9 billion all cash deal.
Fibertech, which serves mid-sized areas in the East Coast and Central states, has a growing presence in Delaware. The company has a data hub “hotel’ in Wilmington and extended its network downstate to include Dover and Georgetown. Click here for previous stories.
The agreement is an all-cash transaction valued at $1.9 billion, which will be funded through a combination of equity and debt. Lightower’s existing financial backers, Berkshire Partners, Pamlico Capital and ABRY Partners, will each provide additional equity to support the transaction. The combined company will be led by current Lightower CEO, Rob Shanahan.
The merger is subject to regulatory approvals and is expected to close in the third quarter of 2015.
“The combination of Lightower and Fibertech is a win for customers by enabling us to serve more locations, across a wider area, and with more service options – all with the same superior level of reliability and customer support,” stated Rob Shanahan, CEO of Lightower. “Lightower and Fibertech have built distinct networks in their respective regions that will be very complementary when merged. In addition, we plan to continue to invest capital in these regions for additional network expansion.”
The combined company will own and operate a, fiber-based network throughout the Northeast, Mid-Atlantic and Midwest. The company will offer customers more than 30,000 route miles of fiber network providing access to nearly 5,000 wireless towers and almost 13,000 locations, including commercial buildings, data centers, financial exchanges, content hubs and other communications facilities.
“This merger between our two high growth companies is a very positive development for both organizations, both customer bases and both sets of employees,” said John Purcell, CEO of Fibertech. “Bringing together these two talented teams under an integrated leadership group will be a great cultural fit, while also broadening opportunities and career growth for employees.” Fibertech is based in Rochester, NY.
Lightower and Fibertech both currently offer fiber-based e portfolios comprised of Ethernet, dark fiber, wavelengths, Internet access, private networks and colocation services.
Both companies also offer industry-specific solutions for financial services, health care, government, education, media, content providers, wireless and wireline carriers, and also cloud and data center connectivity.
Additional terms of the deal were not disclosed.
Current Lightower Fiber Networks investors include Berkshire Partners, Pamlico Capital, and ABRY Partners. Current Fibertech Networks investors include Court Square Capital Partners.
Financing commitments in support of the transaction have been provided by J.P. Morgan and Highbridge Principal Strategies, LLC. Ropes & Gray, LLP is providing legal counsel to Berkshire Partners and Lightower.
Court Square is being advised by Evercore Partners, Inc. and TD Securities in the transaction, with Dechert LLP providing legal counsel.
Last month, Lightower also announced its acquisition of ColocationZone – an enterprise-class data center provider in Chicago.
The market in this region is increasingly competitive with cable and programming giant Comcast, focusing on business customers.
The issue of Internet access for consumers and small businesses seemed to be at the heart of opposition to the merger of Comcast and Time-Warner cable. The companies walked away from the deal on Friday.
