Everstream, a Cleveland-based fiber networks provider, has acquired Detroit’s Rocket Fiber for an undisclosed amount.
This is M&A deal Number 128 that ChannelE2E has covered so far in 2020. See the complete M&A deal list here.
Everstream is backed by AMP Capital, a private equity firm.
The deal includes Rocket Fiber’s infrastructure, service platform and fiber network. The buyout completes Everstream’s coverage in all major Michigan markets and gives the company the largest fiber footprint in greater downtown Detroit, the company said.
Everstream also gains two offices in downtown Detroit and more than 75 employees, the company said.
Rocket Fiber was founded in 2014 to bring reliable fiber internet to Detroit, which at the time was essentially nonexistent. As of early 2020, Rocket Fiber deals primarily in downtown Detroit with some services reaching the suburb of Southfield. The company has also said it wants to expand its services east of Detroit to the Grosse Point area.
Everstream Acquires Rocket Fiber: Executive Perspective
Everstream President and CEO Brett Lindsey commented:
"This opportunity allows us to continue to provide Detroit-area businesses with the high-capacity, low-latency connectivity services they’ve come to expect from their fiber network provider and expands their direct access across Midwest through the growing Everstream network."
Marc Hudson, CEO and Co-Founder, Rocket Fiber, added:
"This acquisition marks the final stage of Rocket Fiber’s evolution. What began six years ago as a moonshot idea to leapfrog Detroit’s technology infrastructure has come full circle as we’ve matured into a rapidly growing and profitable business. By joining Everstream, our customers have access to the same incredible client service along with the added benefit of Everstream’s much larger Midwest footprint."
The deal is part of Everstream’s plan to buildout new fiber infrastructure across the Midwest this year. In 2019, Everstream allocated $250 million for the project, with plans to expand into five new markets, hire 100 new employees, and reach 15,000 route miles of fiber deployed across the Midwest.
Fiber Optic M&A
Demand has increased for more secure data transmissions as concerns for security and data breaches have come to the fore, which is expected to drive growth in the fiber market.
Considerations like these have been fueling speculation within the industry and driving M&A activity within the market over the last few years. Deals of note include:
- May 2019: FirstLight acquired Maine Fiber Company, extending FirstLight’s fiber network throughout Maine and providing a unique route for the company into Canada
- May 2019: Fiber network owner Zayo Group Holdings was bought by Digital Colony Partners and EQT Partners for more than $8 billion.
- Apr 2018: ZenFi Networks and Cross River Fiber merged to create a “leading communications infrastructure provider” that offers fiber and colocation services in the New York and New Jersey metro areas.
- May 2018: ExteNet Systems acquired Hudson Fiber Network (HFN), gaining a fiber optic infrastructure footprint across the New York and New Jersey region.
- Jul 2017: EQT bought Lumos Networks for approximately $950 million.
- Dec 2016: Consolidated Communications acquired FairPoint Communications, a broadband fiber and managed services provider for $1.5 billion in stock.
