Diginet Raises $42M in Over-subscription

After raising $73 million in its second round of private equity financing April 23, Diginet Americas Inc. last month received an additional $42 million from the Series B investment syndicate, as well as a first-time commitment from Meritage Private Equity Fund LP.

Washington D.C.-based Diginet uses radio waves to transmit wireless Internet services to corporations in Argentina and Columbia. The company intends to be operational in three additional markets in Brazil, and has licenses to expand its network to Panama and Peru.

GS Capital Partners III LP, a venture affiliate of Goldman Sachs, is the lead investor in the Series B round, which now totals $115 million. Booth America and Columbia Management-existing investors not disclosed at the first close (PEW May 3, p. 9) -Alta Communications, Norwest Venture Partners, OneLiberty Ventures and Meritage all participated in the round.

“We were debating what do with the over-subscription,” said Chief Executive David Schmieg. “We are now beyond the private equity stage for the future and will next look at the high-yield market to raise additional capital.”

In June, Diginet entered into a $100 million strategic relationship with Ericsson, and will use the company’s equipment and services to continue its build out.

Diginet’s timetable for an initial public offering remains 24 months. In the interim, the company intends to offer services in 15 markets across seven Latin American countries

Meritage Partner David Solomon, formerly of Brooks Fiber Properties, was a member of Diginet’s board prior to the new firm’s commitment, which was its first. To date, Meritage has closed on $177 million, and a spokesperson said a final close at $250 million is expected by year end.