Grain Management, a private equity firm focused on digital infrastructure, today announced it has agreed to sell its controlling interest in fiber provider WANRack to CBRE Caledon Capital Management, the private infrastructure investment arm of CBRE Global Investors.
CBRE Caledon is making the WANRack investment through one of its investment funds and a separately managed account. Additionally, WANRack will continue to be led by its founder and CEO, Rob Oyler, with its management team retaining an equity stake in the business. Finally, the sale of WANRack by Grain Management to CBRE Caledon is expected to close in Q2 2021.
WANRack – Overview
WANRack is a provider of high-bandwidth, fiber-based broadband connectivity services. The company primarily serves K-12 school districts in the United States, operating 68 networks across 23 states.
Overall, WANRack owns 600+ fiber route miles throughout the U.S. and specializes in developing custom-built private fiber Wide Area Networks.
WANRack’s service offerings include E-Rate-compliant lit fiber, dark fiber, and special construction solutions. Through these services, the company is able to serve schools (i.e., K-12 students) and libraries.
Notably, E-Rate is a government-funded program. Therefore, a significant portion of WANRack’s revenues are derived from long-term contracts backed by the U.S. Government.
In total, WANRack connects 450+ schools and over 300k students through its dedicated private fiber networks. Indeed, these schools are often in underserved communities with WANRack being an affordable high-speed fiber broadband solution.
Under CBRE Caledon’s ownership, WANRack plans to leverage its fiber network in core markets to expand into the commercial fiber segment.
Since Grain Management’s initial investment in January 2018, WANRack has grown more than four-fold. In particular, 2020 was a strong year for the company, with WANRack closing more than $30m in new contracts.
Transaction Advisors – Grain Management and CBRE Caledon
Grain Management and WANRack’s financial advisor was TD Securities. Additionally, Grain Management’s legal advisor was Alston & Bird.
CBRE Caledon’s financial advisor was RBC Capital Markets. Additionally, CBRE Caledon was advised by Morgan, Lewis & Bockius as legal counsel, ACM Atlantic as commercial advisor, and Broadband Success Partners as technical advisor.
Grain Management – Overview
Grain Management is a Washington, D.C.-headquartered private equity firm, focused on digital infrastructure investments. Overall, Grain Management is an active investor in digital infrastructure, having purchased fiber companies Summit Broadband and Ritter Communications. Furthermore, the company has also previously sold a portfolio of 400 towers in the U.S. to American Tower.
CBRE Caledon – Overview
CBRE Caledon Capital Management is a Toronto-headquartered infrastructure and private equity firm. The group has a team of 52 investment professionals and oversees $8.5bn of assets under management (AUM). Finally, CBRE Caledon is a business unit within CBRE’s investment management subsidiary, CBRE Global Investors.