DukeNet Communications, the wholesale telecom arm of Charlotte, N.C.-based utility company Duke Energy (NYSE: DUK), has paved a new growth path by establishing a joint venture with Alinda Capital Partners LLC.
Under the terms of the agreement, Alinda affiliate will acquire a 50 percent stake in DukeNet for $137 million while Duke Energy will own the remaining 50 percent in the service provider. Brad Davis, DukeNet's current President, will continue to run DukeNet's daily operations with his current management team.
Primarily serving the Southeastern U.S. markets--including North Carolina, South Carolina, Tennessee and Georgia--DukeNet has made a name for itself selling wholesale fiber and Ethernet services to other service providers. In March, Verizon Wireless named DukeNet as one of its wireless backhaul providers for the Southeast markets where its parent company Verizon Communications does not have available wireline fiber facilities.
Founded during the early commercial Internet boom in 1994, DukeNet, like many utility companies (Progress Energy and KeySpan Energy) that had built out fiber-based networks for their own internal needs decided to branch out into the communications business. Finding that the wholesale telecom business was a bit more daunting than initially expected some of these providers decided to sell off their telecom holdings and refocus their attention on their core energy businesses.
While Duke Energy is not selling DukeNet outright, Alinda could provide DukeNet with more attention and capital as it expands its Southeast network operations to address wireless backhaul and other carrier wholesale capacity needs.
For more:
- see the release here
- and this related release (PDF)
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