Lightower
Overview
Lightower Holdings (“Lightower”) was formed to purchase the U.S. communications subsidiary of UK-based utility, National Grid. At acquisition, Lightower was a portfolio of infrastructure assets, which included 340 towers, 5 DAS systems and 920 route miles of fiber. In 2008, M/C recruited Rob Shanahan, a repeat entrepreneur from M/C II portfolio company, Brooks Fiber, to lead the fiber side of the business. Over the course of M/C’s ownership, Lightower acquired six fiber operators, aggregating and/or building over 7,000 route miles of fiber, making it the largest pure play broadband infrastructure provider in the Northeast U.S.
Thesis
We identified this unique collection of assets that was a non-core subsidiary of a large UK utility that could be purchased outside of a process at an attractive EBITDA multiple. Lightower’s fiber business, which was significantly undermanaged and underinvested in, could be greatly enhanced with the right leadership and level of investment. In addition, we pre-identified numerous acquisition opportunities that could quickly transform Lightower into a leading fiber operator in the Northeast US. The fiber business had an appealing business model highlighted by long-term contracts, high EBITDA margins and attractive churn rates.
Investment
M/C Partners and Pamlico Capital provided funding to acquire Lightower from the National Grid and pursue numerous follow-on acquisitions.
Value Add
M/C recruited repeat entrepreneur Rob Shanahan to be CEO and provided strategy guidance (such as “lighting” the fiber network) and deal support as Lightower acquired 6 companies during our investment.
Outcome
Over the course of M/C’s ownership from 2007 to 2012, through both organic growth and acquisitions, Lightower was transformed from a utility owned fiber network with under $20 million in EBITDA to the largest pure play broadband infrastructure provider in the Northeast U.S. with over $110 million in EBITDA. In December 2012, the company was sold to Berkshire Partners for $1.4 billion representing 5.2x return on our investment.
Team Members
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