Ridgemont Inks First Announced Buy Since BofA Spin Off

With its planned buy of United Private Networks, Ridgemont Equity Partners unveiled its first announced acquisition since spinning off from BofA.

First announced acquisition? Yeah, you heard right. Ridgemont has made an investment in a second company, an energy firm, but hasn’t told anyone yet.  When I asked the name of the company, Travis Hain, a Ridgemont partner, said: “We’ll let you know when we announce it.”

Gee, thanks.

Anyway, Ridgemont is taking a majority stake in UPN, of Kansas City, Mo. The company provides high-bandwidth, fiber-based communications networks to school districts and government organizations. The sellers were the shareholders of UPN, which will retain a minority stake in the company.

Ridgemont didn’t provide a deal value. The PE shop typically invests $25 million to $100 million equity per transaction. “It’s in the range,” said George Morgan, a partner.

The Royal Bank of Canada, CoBank and Webster Bank are providing senior debt.  The deal is expected to close in fourth quarter.

UPN looks remarkably similar to another recent deal for Ridgemont. Last week, the PE shop announced it and Nautic Partners were selling Fibertech Networks to Court Square Capital Partners for north of $500 million.

Morgan says the two companies are very similar except that Fibertech targets the Northeast, UPN the Midwest. Ridgemont likes the fiber network sector, which saw a number of companies formed in the late 1990s or early 2000s. “We’ve seen the industry grow consistently through different economic cycles,” Morgan said. “We’ve seen a tremendous demand for data traffic.”

Morgan wouldn’t talk about Ridgemont’s investment in Fibertech, which the PE shop held for nearly a decade. Ridgemont wouldn’t be against another long hold for UPN, Morgan said.

Ridgemont spun off from BofA earlier this month. The newly liberated team plans to begin marketing for a fund next year and complete fundraising by 2012, Hain said. Ridgemont is managing a $1.3 billion portfolio, which represents about 23% of BofA’s PE portfolio as of June 30.

“The spin-off has been seamless and we’re off to very good start with an exit and a new investment,” he said. (Make that two investments.)