Cox Communications is acquiring a large stake in Unite Private Networks (UPN), bolstering its metro and regional fiber portfolio across a number of Tier 2 and Tier 3 markets. The cable provider joins Ridgemont Equity Partners and the company's management team as a major shareholder in UPN.
Financial terms of the deal were not disclosed and it's not clear how large of a stake Cox will actually have in UPN. The acquisition is subject to customary regulatory approvals and closing conditions.
Upon closing, UPN will be led by its existing management team and operate as a standalone business within the Cox family of companies. Cox and UPN will work together to pursue strategic new growth opportunities.
Todd Smith, a spokesman for Cox, told FierceTelecom in an e-mail that the acquisition of the UPN stake is part of a broader initiative the MSO has taken to invest in network infrastructure that complement its own network.
"Cox believes there is tremendous value in telecom infrastructure, beyond our existing network assets, particularly given the rise of cloud services and growing bandwidth demands," Smith said. "We've invested in data centers (EdgeConnex, ViaWest), wireless towers (Insite Wireless Group) and a fiber provider (EasyTel) previously and the UPN investment is a continuation of this strategy."
UPN has emerged as an alternative fiber-centric service provider to schools, government, carriers, data centers, hospitals and enterprise business customers. The service provider currently operates a 6,200 route mile fiber network that connects to 3,750 on-net buildings across 20 states, primarily in the central United States.
For UPN, the deal gives it further scale. In 2010, Ridgemont purchased a majority stake in UPN, giving it necessary capital to conduct its ongoing network expansion.
With Cox as a key owner, UPN may have even more capital to expand its network footprint.
UPN has been on a growth path over the past six years, extending its dark and lit fiber services into Colorado, Dallas Texas, Iowa, Kansas City and Omaha. The service provider has been also enhancing its wireless backhaul skills, lighting over 100 cell sites with fiber in 2015.
Tower backhaul is only one part of UPN's wireless backhaul experience. The service provider has been growing its turnkey small cell capabilities, a skill that could complement Cox's backhaul capabilities.
Seeing turnkey services as a natural extension of its business, UPN told FierceTelecom in a previous interview that they are conducting everything from site acquisition, installation and maintenance services.
Cox itself has never been one to shy away from acquiring complementary assets, purchasing other fiber assets like EasyTel in 2013, for example. However, it's unclear how it plans to leverage the UPN assets.
There a number potential outcomes Cox could take with this deal. The MSO could integrate the UPN fiber assets with its own in its existing markets or pursue other fiber-related projects outside of its traditional cable footprint.
- see the release
Special Report: AT&T, Verizon, and competitive providers remain divided on dark fiber, but interest is rising
UPN, Zayo carve out growing niche in turnkey wireless backhaul services
UPN says turnkey small cell installation is a natural extension of its offerings
UPN remains open to acquisitions, finds Tier 2 market niche for dark fiber
UPN lights 100th cell site with dark fiber, sees ongoing small cell backhaul growth
Unite Private Networks promotes Adkins to president