By Culturing Fiber, Rural Operators Attract Investors - Report
Rural and regional operators will continue attracting investor interest and money in 2020, according to a recent report by CoBank.
This will translate into more mergers and acquisitions, as well as the ability of smaller providers to expand their operations, staff, and fiber infrastructure, the national cooperative said. CoBank, which is part of US Farm Credit System, provides loans and other financial services to coops, agribusinesses, rural utilities, as well as rural broadband operators and service providers.
In 2019, valuations for rural and regional providers reached "levels that were unthinkable a few years ago," said the report, titled: 2020 The Year Ahead: Forces That Will Shape the US Rural Economy.
Fiber pays off
This year, M&A activity was steady. Examples include:
- Midwestern Bluebird Networks inked a purchase agreement in December to acquire Illinois Network Alliance, only months after Bluebird itself was purchased by investment group Macquarie Infrastructure Partners .
- Also this month, fiber-network consolidation firm Segra -- which targets the South and MidAtlantic -- acquired NorthSouth Communications, which serves parts of North Carolina, including the Piedmont area, to expand its fiber footprint.
- Private equity firm GTCR used its portfolio company Mega Broadband Investments to buy Vyve Broadband, which has headquarters in Oklahoma.
- Everstream in October said it would purchase a 200-plus-mile Indianapolis-based fiber network and CLEC operation from DataBank, which it had acquired from LightBound.
- And, when Vast Broadband acquired regional broadband fiber provider NTS Communications, Vast added NTS's more than 2,700 miles of fiber to its existing footprint.
"Rural and regional telecommunications operators will become targets in 2020 for investors and strategic buyers as the pool of available mid-sized fiber transport companies dries up," CoBank wrote.
— Alison Diana, Editor, Broadband World News. Follow us on Twitter or @alisoncdiana. Like what you read: Sign up for our weekly newsletter.
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