Cox is acquiring Charlotte, North Carolina-based regional operator Segra from private equity firm EQT Infrastructure, the company announced today. Segra operates a fiber network across nine states in the mid-Atlantic region and has roots in the independent telco sector.
Segra’s 30K mile fiber network has over 10K on-net locations and connectivity to over 7K wireless towers. The company also operates 9 data centers and owns two local operators, North State and Lumos. The Cox deal does not include the North State and Lumos properties.
According to a Cox press release, Segra will continue to operate under the Segra brand, operating as a stand-alone business within the Cox family of companies post-acquisition. Segra’s existing management team will continue to lead the Segra enterprise and carrier organization.
“Cox is focused on buying and investing where it makes sense, and we believe that the demand for broadband infrastructure will continue to grow, making fiber an attractive area for long-term investment,” said Pat Esser, president and CEO, Cox Communications in a press release. “Acquiring Segra’s commercial services business is another key milestone in our pursuit of strategic infrastructure to ensure that we’re providing the best products and services to our customers.”
According to a Bloomberg report, the deal is valued at $3 billion, including debt. EQT acquired both Lumos Networks and Spirit Communications back in 2017 and rebranded the company as Segra in 2019. The company acquired North State in 2020.
Spirit Communications was a regional fiber network owned by several independent telcos based in the Carolinas. After consolidating Lumos and Spirit in 2019, the company operated a 21K route mile fiber network with 9K on-net locations.
Segra targets SMB, enterprise, and wholesale business segments with connectivity, collaboration, security, and cloud services. The company website notes Segra employs 900 people across 90 facilities in 44 markets.
The remaining Lumos and North State properties reach approximately 200K residential and SMB locations in their Virginia and North Carolina locations. In a press release, EQT named Diego Anderson CEO of a newly formed company that will operate Lumos and North State. Anderson was previously Senior Vice President and General Manager within Segra.
Privately held, Atlanta-based Cox is the third largest cable company in the U.S. Cox serves 607 markets across 19 states, according to its website. Like all large cable companies, Cox is growing its focus on SMB and enterprise opportunities. Bloomberg reports the company already has 355K business accounts. Recent network infrastructure acquisitions by Cox include EasyTel, EdgeConneX, InSite Wireless, StackPath, Unite Private Networks and ViaWest.
The Cox Segra deal highlights the attractive nature of regional fiber network acquisitions, primarily because of their rich fiber networks. Two recent deals include Zayo acquiring IFN of Indiana and Cable One acquiring South Carolina-based Hargray.