Lightower Hero

The consolidation of the fiber market continues. Lightower Fiber Networks, with a fiber footprint in Chicago and the northeast, may be exploring a potential sale. According to a brief report from CTFN, Level 3 and Zayo are rumored to have an interest.

News of the Lightower sale comes on the heels of other mergers and acquisitions throughout the telecom industry. TPG recently bought RCN and Grande Communications for over $2 billion; and Oxford Networks merged with FirstLight Fiber in July just after being acquired by Oak Hill Capital. Prior to these deals, Charter Communications had acquired both Time Warner Cable Inc. and Bright House Networks, while Altice had bought Suddenlink Communications and Cablevision.

Lightower is currently co-owned by Berskhire, Pamlico and ABRY, three private equity firms that all have a track record of being at the forefront of sales and acquisitions.  ABRY was also involved in the RCN/Grande sale.

All things considered, a sale for Lightower is a logical step forward. Telcos backed by private equity often face exit events at some point in their lifecycles; the only mysteries usually revolve around what the event is and when it’s going to happen. For a company like Zayo it was an IPO. For FiberTech and RCN it was an acquisition. And Lightower appears to be following suit.

Consolidation yields mixed results for businesses needing bandwidth services. On a larger scale, Lightower’s potential sale and the ongoing consolidation of the fiber market could translate to less competition in the marketplace. On the flip side, as telecom companies merge they tend to incorporate a wider suite of products and services and gain access to a larger footprint that could create new opportunities for business customers.

For more insight into mergers and acquisitions happening within telecom and what it means for the market at large, contact our team at NEF.

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