Lightower Fiber Networks and Fibertech Networks have agreed to merge. The value of the transaction is $1.9 billion. The deal is expected to be completed in the third quarter of this year. Headquartered in Boxborough, Massachusetts, Lightower Fiber Networks is an all-fiber provider of custom network services. And, Fibertech, which is located in Rochester, New York, is a provider of fiber-optic based network services. Lightower Fiber Networks’s backers include Berkshire Partners, Pamlico Capital and ABRY Partners while Fibertech Networks’ backers include Court Square Capital Partners.
BOXBOROUGH, MA and ROCHESTER, NY – April 27, 2015 – Lightower Fiber Networks, a leading provider of custom, high-capacity network services that ensure optimal application and business performance, and Fibertech Networks,a leading provider of fiber-optic based network services throughout mid-size cities in the Eastern and Central regions of the United States, today announced that they have entered into a definitive agreement to merge. 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 pending 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 high-performance, fiber-based network throughout the Northeast, Mid-Atlantic and Midwest. The company will offer customers over 30,000 route miles of fiber network providing access to nearly 5,000 wireless towers and almost 13,000 on-net service locations, including commercial buildings, data centers, financial exchanges, content hubs and other critical 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.”
“We are excited about Lightower and Fibertech coming together. Both companies operate outstanding networks with distinct and complementary footprints, making this a natural fit,” explained Randy Peeler, Managing Director of Berkshire. “We have invested in the telecommunications infrastructure space for nearly 20 years and believe that the combined company, with its incredibly robust network, is well positioned for continued growth serving customers with an ever-increasing need for high-performance bandwidth.”
More Customer Options
Lightower and Fibertech have very complementary networks and geographic footprints. The combination of the two accelerates the growth strategies employed by both companies to provide best-in-class, fiber-based networking solutions to enterprise, carrier and government customers. The combined company will provide customers with access to more services in more locations across a broader geographic area while also offering additional and diverse routes between locations. The combined network will also dramatically increase the number of data centers, financial exchanges, interconnection facilities, and wireless towers that are served with fiber-based access.
Lightower and Fibertech both currently offer fiber-based service 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.
In March 2015, Lightower also announced its acquisition of ColocationZone – an enterprise-class data center provider in Chicago.About Lightower Fiber Networks
Lightower Fiber Networks is a leading, all-fiber provider of custom, high-capacity network services that ensure optimal application and business performance. Serving enterprise, government, carrier and data center customers, our comprehensive suite of fiber-based solutions is delivered across a robust, dense and highly-reliable network. The company offers over 20,000 route miles of network, providing access to over 8,500 service locations throughout the Northeast, Mid-Atlantic and Chicago Metro with connectivity to critical international landing sites. Lightower Fiber Networks is headquartered in Boxborough, MA. For more information, visit www.lightower.comor call 1.888.LT.FIBER.
About Fibertech Networks
Headquartered in Rochester, N.Y., Fibertech Networks is a leading provider of fiber-optic based network services in 30 mid-size service areas across the Eastern and Central U.S., and is led by Court Square Capital Partners of New York, N.Y. The company currently owns and operates a fiber optic network of more than 12,000 route miles, which contains more than 7,000 on-net locations with over 4,000 cell sites with its fiber-only network infrastructure. With this network, Fibertech serves wireline and wireless carriers, data centers, large enterprises, and facilities in the higher education, health care, and government verticals. For more information, visit www.fibertech.com.
About Berkshire Partners LLC
Berkshire Partners, the Boston-based investment firm, has invested in over 100 middle market companies since 1986 through eight investment funds with aggregate capital commitments of over $11 billion. Berkshire has developed specific industry experience in several areas, including communications, consumer products and retail, business services, industrial manufacturing and transportation. Within communications, the firm has particular expertise in infrastructure investments including Crown Castle International (NYSE:CCI) and The Telx Group. Berkshire has a strong history of partnering with management teams to grow the companies in which it invests, with the goal of consistently achieving superior investment returns. The firm seeks to invest $50 million to $500 million of equity capital in each portfolio company. For additional information, visit www.berkshirepartners.com or call 617-227-0050.
About Court Square Capital Partners
Court Square is one of the most experienced teams in the private equity industry. Since 1979, the team has made over 200 investments, including several landmark transactions, and has developed numerous businesses into leaders in their respective markets. Based in New York, N.Y., Court Square invests in companies that have compelling growth potential. The firm manages over $5 billion in aggregate capital commitments while focusing on the following four sectors: business services, general industrial, healthcare and technology / telecommunications. For more information on Court Square, please visit www.courtsquare.com.