MetroNet, a fiber broadband provider in the Midwest backed by KKR and Oak Hill Capital, today announced the acquisition of CTS Telecom Inc, a fiber-optic internet company serving Battle Creek, Kalamazoo, and several other Michigan communities. Specifically, the acquisition enables MetroNet to expand CTS’ fiber-optic network to reach more Michigan residential and business customers. Indeed, MetroNet plans to invest more than $100m to expand fiber broadband services to many surrounding communities of Southwest Michigan.

CTS Telecom – Overview

CTS Telecom currently serves portions of Battle Creek, Kalamazoo, Portage, Texas Township, and Climax in Southwest Michigan. The company offers symmetrical upload and download speeds of 1 gigabit per second to homes and businesses in these communities. Additionally, CTS Telecom provides fiber phone service and fiber IPTV (Internet Protocol television).

Size and Growth

The latest reported financials of CTS Telecom (Climax Telephone Company) show the company generated $8.7m of revenue in 2020 and had 37 employees.

Over the coming months, CTS will fully integrate under the MetroNet brand, with harmonization of product line features in 2022.

Management

CTS Telecom is led by its President & Chief Executive Officer, Stacey Hamlin.

MetroNet – Overview

MetroNet is a fiber infrastructure company serving and constructing networks in 120+ communities across Indiana, Illinois, Iowa, Kentucky, Michigan, Minnesota, Ohio, Florida, North Carolina, Virginia, Texas, Wisconsin, and Missouri.

Moreover, in the near future, MetroNet expects its network will be available to 1+ million residential households and business locations.

Recent Expansions

Beyond MetroNet’s expansion in Michigan through CTS Telecom, the company has recently been active in announcing new fiber projects:

  • Missouri: “multi-million dollar investment” in the market of O’Fallon
  • Texas: market of Tyler and surrounding communities
  • Ohio: $15m investment in the city of Beavercreek
  • Wisconsin: $12m to $15m investment in the market of La Crosse

Management

MetroNet is led by its Chief Executive Officer, John Cinelli. Additionally, the company recently appointed a new President & Chief Operating Officer, Dave Heimbach.

Ownership

Following KKR and Oak Hill’s recapitalization of MetroNet, which closed in August 2021, the company’s current ownership structure is:

  • KKR: 42% ownership overall, through its fund KKR Global Infrastructure Investors III
  • Oak Hill Capital Management: 27% ownership overall, through its fund Oak Hill Capital Partners V and Limited Partner (LP) co-investors
  • Cinelli Family: 23% ownership overall, mainly by John Cinelli

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