Merger & Acquisition

Fiber network consolidation continues with the news today of a complementary merger between MetroNet and Vexus Fiber. MetroNet operates primarily in multiple Midwest and southeastern states, while Vexus has concentrated on Texas, New Mexico and Louisiana.

Both companies have been expanding aggressively through internal growth. MetroNet also has made several acquisitions in recent years.

MetroNet and Vexus will continue to operate under their current brands with their current management teams.

“Vexus has a fast growth and high customer service mentality, very similar to MetroNet, and joining with them allows us to quickly expand our service area to even more Americans,” said MetroNet CEO John Cinelli in a press release.

“With this merger, we can reach even more people faster,” said Jim Gleason, Vexus president and CEO.

Terms of the merger were not disclosed, but it’s worth noting that both companies are in Oak Hill Capital’s investment portfolio. Vexus is also part owned by Pamlico Capital. And MetroNet gained a big boost in April 2021 when KKR joined Oak Hill as an investor in the company.

MetroNet offers service in more than 120 communities in Indiana, Illinois, Iowa, Kentucky, Michigan, Minnesota, Ohio, Florida, North Carolina, Virginia Texas, Wisconsin and Missouri. Texas is the only state in which both MetroNet and Vexus have operations.

Vexus was originally known as NTS Communications, which was acquired by Vast Broadband in 2019. Vast subsequently changed the NTS name to Vexus; then in October 2020, Vast was acquired by GI Partners.

Mergers such as the one between MetroNet and Vexus are becoming quite commonplace as competitive carriers are in a sort of fiber-to-the-premises (FTTP) land grab. A similar entity, now known as Astound Broadband, includes the assets of companies formerly known as RCN, Grande, Wave, enTouch and Digital West.

FTTP is looking like an increasingly attractive opportunity, now that consumers are demanding faster upstream speeds that can be supported by fiber broadband but not traditional cable infrastructure. The upshot is that whoever brings FTTP first to a market has a substantial competitive edge.

Fiber providers also may have an edge as the broadband industry is set to receive unprecedented government funding to help support broadband deployments in rural areas.

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