Recapping a Fairly Active Year for Broadband M&A

Even though on the surface 2023 may not have seemed like a busy year for broadband mergers and acquisitions, the industry actually saw plenty of activity, most of which related to fiber and private investors.

Impact: With the lure of billions in BEAD funding, investment firms and private equity groups spent the year circling fiber providers both big and small, evaluating possible acquisition targets to determine if their network deployments and expansion strategies made them worth acquiring. Fixed wireless, which has dominated broadband subscriber growth for several years, also drew attention from investors with deals involving GigFiber (formerly LTD Broadband), Gigstream, Nextlink, and Bluestem, among others. But all year it felt like fiber offered investors the most opportunity and subsequently got most of the attention. Anyone following the broadband industry can probably guess that Consolidated’s more than $3 billion deal to sell itself to Searchlight Capital Group and partner British Columbia Investment Management Corporation made the biggest splash last year even though it has yet to be finalized.

Altafiber, previously Cincinnati Bell and itself acquired by Macquarie Infrastructure Partners in 2021, purchased the assets of local Ohio fiber player BridgeWired to help with its ongoing expansion effort both within its traditional three-state footprint and in new areas within those three states (Indiana, Kentucky, and Ohio). In the Pacific Northwest, Ziply Fiber continued to pursue fiber expansion through acquisition in addition to its organic fiber deployments and bought Eastern Washington/ Northern Idaho regional provider Ptera and its fiber and fixed wireless services. Numerous regional fiber providers also bought up smaller competitors or complementary providers, including Shentel’s blockbuster $385 million purchase of Horizon Telecom to extend its Mid-Atlantic footprint into the Midwest, Arvig’s purchase of a fiber network from ALP Utilities in Minnesota, and Lightstream’s purchase of Indiana’s Monon Telephone Company. Also of note, Michigan providers Winn Telephone and Peninsula Fiber set about merging and Ozark Fiber snagged assets from Missouri Telecom.

On the private investment front, Telecompetitor tallied nearly a dozen deals where an investment firm or private equity group either took control of a fiber provider or established a new one. Perhaps the biggest name provider involved in one of these deals was Rise Broadband, acquired by GI Partners as part its investment shift from fixed wireless to fiber. Antin Infrastructure partners acquired Empire Access, which operates in New York and Pennsylvania, as well as another company called North Penn. Midwestern fiber player Surf Internet, owned by Bain and Post Road, bought up fiber assets from MiSignal. Infrared Capital Partners established LiveOak Fiber, which operates in rural Florida and Georgia and acquired ATC Broadband. Palisade Infrastructure has a deal in place to purchase Consolidated’s assets in Washington state and purchased Tacoma-based local fiber player Rainier Connect and renamed it Lightcurve. Cityside Networks, located in Orange County, CA, had a majority interest purchased by SDC Capital Partners. CBRE Investment Management acquired Missouri-based Gateway Fiber. And i3 Broadband, based in Rhode Island with operations there and in the Midwest and owned by Wren House Infrastructure, acquired Big River Broadband.

While the private investors mentioned above purchased these fiber providers for specific reasons tied to the particular growth strategies of each firm, the deals weren’t necessarily focused on one region and in fact occurred with providers scattered all over the country, possibly with an eye toward finding the best opportunities to win BEAD funding. With the federal government set to start distributing cash from the program to states this year, there will be likely be additional opportunity for mergers and acquisitions over the next several years, especially as the fiber market grows more saturated. Both providers that win BEAD funding and providers that miss out on BEAD and other public funding could become targets, although those searching for other avenues to expand and grow their business model outside of the BEAD model may get the most attention.

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