2018 M&A Review: North American Networks Edition

December 27th, 2018 by · 2 Comments

It seems like almost year since 2018 began. Oh wait, it actually has been almost a year. The world of infrastructure M&A was a fairly busy one once again, and I'll bet that many have forgotten swaths of the year's events. Let's take a quick look back.

In North America, once you get past the big wireless merger between T-Mobile and Sprint, infrastructure M&A was decidedly focused on smaller regional moves this year. Both strategic buyers and private equity seemed to zero in on opportunities that spanned minor or possibly a few major markets.

There were only a few repeat network buyers out there this year. In terms of raw numbers, Conterra  made two more moves down south: Network Communications and NUSA.  Meanwhile, although it was in Europe that GTT made their big move, they also made two North American deals: Access Point in North Carolina and Accelerated up in Canada, both adding to their customer lists and talent pools.  Ever-active Zayo bought two and sold one this year, acquiring Neutral Path in the upper Midwest and Optic Zoo in British Columbia, while divesting Scott-Rice to New Ulm Telecom up in Minnesota. And Uniti managed to win two fiber sale/leaseback deals, one with TPx and the other with CableSouth.

But some of the most interesting moves this year were of the solo variety. Two were focused on NYC. ZenFi's merger with Cross River Fiber created a new regional power in the NY/NJ metro area.  And ExteNet followed up last year's purchase of Axiom with another NYC-based deal, this time taking on Hudson Fiber Network. Meanwhile, the former Allied Fiber Southeast assets reemerged under the ResurgenceIG umbrella, and Fatbeam added more muscle in the Pacific Northwest with a deal for Ednetics' IP Connect.  Windstream added to its CLEC collection with the acquisition of MASS Communications. Fresh off its closing of the Birch deal, Fusion took out MegaPath as well.  And one cable MSO made a move this year: CableOne bought out ClearWave in southern Illinois.

As they always do, private equity groups made a few moves this year also. AMP Capital bought Everstream, taking on the growing midwestern fiber operator's next stage in development. Novacap TMT did something similar but lower profile, buying Horizon Telcom in nearby southern Ohio. The Thermo Group merged FiberLight with Globalstar, putting its infrastructure under one roof [actually, this deal was called off a few months later].  And Grain Management bought a controlling interest in WANRack.

And finally, another recurring theme we saw this year was the sale of individual dark fiber assets by national and supraregional players. CenturyLink divested three former Level 3 markets, with Syringa buying their Boise network, UPN taking on Albuquerque, and FirstDigital stepping up in Tucson. But I'll bet many forgot FiberLight's sale of its southern Florida network to Cogeco's Atlantic Broadband early in the year.  And most recently, Windstream sold off its Minnesota and Nebraska infrastructure to Arvig.

What stands out to me in this review is what isn't there.  The frequency remained high, but the profile was generally lower than last year, which was headlined by Crown Castle's deal for Lightower or the previous year's purchase of Level 3 by CenturyLink.

Tomorrow we'll take a look at Europe.  That of course will all lead into 2019's M&A, where we will take the temperature of the marketplace via our yearly polls.  The results will then be featured and discussed at Metro Connect USA, which takes place in Miami at the end of January.   I expect to be there as always, will you?

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Categories: CLEC · Fiber Networks · Mergers and Acquisitions · Metro fiber

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