More activity in the metro and regional fiber space today. DukeNet, the telecommunications arm of Duke Energy, has brought in private equity money to fund its expansion. Alinda Capital Partners and Duke Energy will form a 50/50 joint venture, with Alinda injecting some $137M in cash for the privilege. DukeNet covers both North and South Carolina with some 5300 route miles of metro and intercity fiber, focusing on wholesale customers and large enterprises with a fair amount of tower backhaul, both wired and microwave.
Just what size business did that $137M buy half of? That's hard to say, as DukeNet's contribution to its parent is not large enough to merit a separate line in its financials. If one were to guess a 9x EBITDA, EBITDA would be in the $15M range, and if adjusted margins were 30-40% then revenues would fall in the $40-50M range. But the error bars on that back of the envelope calcuation are very, very large.
A more interesting question is just how much $137M *will* buy, because I really don't think DukeNet needs that kind of money for capex. So the question is, what fiber assets out there might interest DukeNet that $137M plus whatever cash they have on hand might buy? KDL is probably too big, but I'm thinking that perhaps the Fibernet assets in West Virginia that seem to be for sale as well might fit the bill. Other possibilities that is geographically adjacent might be BalsamWest Fibernet up in the hills or perhaps Southern Telecom for an expansion southward into Georgia and Florida.
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