Late last week there was another fiber M&A that slipped through my nets for a couple days. The European private equity firm EQT Infrastructure has bought a majority stake in Spirit Communications.
Spirit Communications has flown largely under the national radar, but it operates a 9,000 mile fiber network spanning some 17 metro markets in both North and South Carolina as well as parts of Georgia. That network hooks up 2,400 buildings as well as 2,500 cell sites. Their bigger on-net markets are Columbia, Charleston, Florence, Spartanburg in South Carolina and Asheville and Wilmington in North Carolina. A couple years ago Spirit managed to make an M&A that I missed entirely, acquiring Scana Communications and picking up 1,125 fiber route miles in the process.
EQT is also in the process of closing its purchase of Lumos Networks, and this deal must be seen in that context. The networks of Lumos and Spirit are directly contiguous, and Spirit was one possible target I had thought either Lumos or Lightower might fit well with someday. If the two were combined, they'd control a regional fiber footprint stretching from Atlanta up through Philadelphia. Whether EQT has such plans is unclear at this point, but I rather doubt they are unaware of the possibilities.
And of course there's the question of what EQT does next. When it comes to fiber M&A, zero and one make sense, but where there are two there are usually soon three. So who might EQT Infrastructure have next in its sights? If contiguous territories are the key, maybe one of the energy-owned fiber operators Southern Telecom or DQE Communications would make the most sense.
Financial terms were not disclosed, but Spirit's current owners will continue to hold a stake in the company going forward.