Lightower rumored to be exploring a sale with Level 3, Zayo as potential suitors

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Lightower, a regional fiber provider serving the Northeast and Chicago, is in the process of finding a suitor during a time of ongoing consolidation of the fiber infrastructure market.

Citing two unnamed sources, a CTFN report said that Level 3 and Zayo are rumored to be interested in purchasing Lightower.

Lightower is co-owned by three private equity firms -- Berkshire, Pamlico and ABRY -- all of which are used to making deals to acquire and sell assets. ABRY just sold off RCN and Grande Communications for nearly $2.25 billion to TPG, creating 10 cable operator business services provider threat. Joining TPG as a investor is Google Capital.

While the idea of Level 3 or Zayo buying Lightower could make sense as it would deepen either provider’s fiber and Ethernet footprints, Lightower could also do well by acquiring other companies. Lumos, FirstLight Fiber or the newly rebranded Electric Lightwave could be potential acquisition targets.

A purchase of Lumos or FirstLight would make more logical sense since they reside in adjacent markets. Lumos plans to spin itself out into a fiber-centric company later this year. During its second quarter earnings call, the service provider said it “expects to articulate a full set of separation plan alternatives” during its third quarter earnings call.”

Meanwhile, FirstLight is in the process of being acquired by Oak Hill Capital. Upon completion of that deal, Oak Hill plans to integrate FirstLight with Oxford Networks. Oak Hill signed an agreement to acquire FirstLight from its current owner, Riverside Partners, in March 2016, which is still subject to prior state and federal regulatory approval.

But Oak Hill’s move to build a fiber network war chest does not stop with FirstLight and Oxford. The private equity firm recently announced its intent to acquire Sovernet Communications, a middle mile fiber provider that serves Vermont, New York and southwest New Hampshire.  

Outside of the Northeast footprint, the reemerged Electric Lightwave could also be an attractive fiber asset option. Earlier this month, Integra Holdings split itself into two providers -- Integra and Electric Lightwave -- as the company pivoted to reestablish itself as a fiber-centric service provider.

For more:
- CTFN has this article

Related articles:
Lumos grows Q2 FTTC, enterprise revenue 22% to $22M, continues with separation plan
Electric Lightwave becomes a standalone fiber provider as Integra splits businesses
Oak Hill Partners acquires Sovernet Communications, further expands Northeast fiber network presence

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