The EQT Infrastructure III fund says it has signed a definitive agreement to invest in a majority stake of Spirit Communications, a fiber-based data and broadband service provider, from its founding partners. The transaction is pending customary regulatory approval and closing conditions. Details of the transaction were not disclosed.
Operating in the fiber infrastructure sector, Spirit is a pure-play provider in South Carolina, North Carolina, and Georgia of the U.S. This is a core market for EQT, who secured a foothold in the U.S. earlier this year by making an acquisition of Lumos Networks Corp, which supplies fiber-optic network services in the U.S. Mid-Atlantic region (see "EQT to buy Lumos Networks for $950 million").
Founded in 1985, Spirit provides fiber-based data and broadband services to enterprises, governments, and wireless carriers. The company's network serves thousands of customers across 17 metro markets and has over 9,000 miles of fiber. Spirit's fiber is directly connected to over 2,400 buildings and more than 2,500 cell sites.
EQT says it will invest in developing Spirit's fiber footprint and services. The company anticipates that the underlying macro trends of growing data traffic and increasing data bandwidth needs will contribute to company growth and improved customer service.
"We are very impressed with what the management team and the current owners have been able to achieve with the company and are thrilled about the opportunity to invest in the future growth and development of Spirit," said Jan Vesely, director of EQT Partners, investment advisor to the fund. "The company is a perfect match for EQT Infrastructure's expertise in the fiber sector and strategy to build a platform for growth in the region."
"After many months of effort to identify the right partner to continue and accelerate Spirit's capabilities, EQT was identified as the type of partner that would help transform the business," said Robert Keane, Spirit Communication's president and CEO. "EQT has had a long and storied history beginning with the heritage of the Wallenberg family which has significant investments in many household names in North America, such as, Electrolux, AstraZeneca and Ericsson to name a few. I am very excited to join the new board and to work with EQT on the continued growth of Spirit."
Following the transaction, Spirit Communications president and CEO Robert Keane, and current chairman of the board of Spirit Brian Singleton will each be appointed to the new board of directors. Spirit's current owners will retain what EQT described as a "considerable" stake in the company.
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