A sizeable chunk of metro and regional fiber changed will be changing hands this summer. Oak Hill Capital Partners has announced an agreement to buy control of FirstLight Fiber from Riverside Partners, with Riverside remaining as a minority investor.
FirstLight Fiber operates a dense fiber network in upstate New York and norther New England. Riverside originally invested in the company via the Albany metro operator Tech Valley Communications, through which it bought the regional provider SegTel back in 2011. They then followed up that bit of consolidation with the purchases of Teljet in Vermont in 2013 and G4 in New Hampshire in 2014. On the organic front, the company recently built out a network in Westchester, Rockland, and Orange counties just north of New York City.
I have long thought FirstLight Fiber might be the target of some further M&A, but my guess would have been one of the larger strategic buyers, i.e. Zayo or Lightower. The fact that Oak Hill is moving in suggests that they have plans to expand the asset base further, and probably organically along the lines of the recent expansion south along the Hudson. The growing demand for wireless backhaul in the northeast can only help, but perhaps requires a bigger capex budget to fully take advantage of.
Of course, there could be more M&A in store as well. There aren't as many targets available as there once were in FirstLight's territory, but there are a few in adjacent regions.
Financial terms of the transaction were not disclosed, but the deal is expected to close in the third quarter. Bank Street Group acted as advisor to FirstLight.