Lumen Sells ILEC Assets in $7.5 Billion Deal; Apollo Launching Standalone Company
… NewCo, whose platform will touch residential and business customers in the Midwest and Southeast. Apollo sees an opportunity to “bridge the digital divide” between rural and suburban areas through internet connectivity.
Bob Mudge, Chris Creager, and Tom Maguire – all former Verizon executives who helped build Fios – will lead the company. Keep in mind that this is the same Apollo Global Management that recently sold Tech Data and bought Verizon’s media unit.
Earlier this week, Apollo announced a $200 million investment in FirstDigital Telecom, a Utah-based fiber-based carrier. That funding announcement came at around the same time that FirstDigital publicized its acquisition of fellow Utah provider Veracity Networks.
Infrastructure Bill
Demitri Diakontonis of Mergers&Acquisition said the developing U.S. infrastructure bill incentivizes private equity firms like Apollo to invest in broadband.
“Infrastructure isn’t just roads and bridges anymore. Even a slimmed-down version of a federal infrastructure bill would incentivize private investment in companies,” Diakantonis wrote. “The FirstDigital investment … builds upon the firm’s 30-year track record in which Apollo funds have invested more than $20 billion in infrastructure-related opportunities. Apollo is currently investing out of its second dedicated infrastructure fund, which focuses on communications, power and renewables, transportation and midstream energy.”
Keep in mind that Lumen (then operating as CenturyLink) sold Tucson, Arizona-based metro network assets to FirstDigital back in 2018. The U.S. Department of Justice mandated that CenturyLink sell certain Level 3 Communications metro fiber network assets in New Mexico, Idaho and Arizona to merge with Level 3.
Apollo’s Andrew Kirby told Capacity Media that FirstDigital represents a “substantial market opportunity.”
“This investment underscores our belief in the leading role that fiber operators will play in providing critical connectivity to enterprises and communities alike,” Kirby said.
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