MetroNet, a fiber broadband provider in the Midwest, today announced that KKR and Oak Hill Capital are making new equity investments into the company to help accelerate its growth in building and connecting fiber-to-the-premise (FTTP) for 1 million homes and businesses. Notably, Oak Hill has been an investor in MetroNet since 2014, whereas KKR is investing in the company for the first time. In addition, the Cinelli family (MetroNet’s founders) and WaveDivision Capital (backed by Steve Weed the founder of Wave Broadband) are shareholders of MetroNet. Finally, the transaction will close in Q3 2021.

MetroNet – Overview

MetroNet is an Indiana-headquartered fiber infrastructure company whose services include fiber broadband internet, fiber phone, and fiber IPTV. The company’s fiber network passes more than 2.0 million people in 100+ communities across Indiana, Illinois, Iowa, Kentucky, Michigan, Minnesota, Ohio, Florida, and North Carolina. Currently, MetroNet’s network serves over 300k residents, schools, hospitals, and businesses.

Overall, the company targets customers that are traditionally underserved by the nationwide communications carriers (e.g., AT&T and Lumen Technologies). MetroNet delivers symmetrical speeds, typically ranging from 100 megabits per second to 1 gigabit per second, to homes and businesses.

Growth Capital from KKR and Oak Hill – MetroNet

Investments from KKR and Oak Hill will allow MetroNet to extend its fiber network to ‘hundreds of thousands’ of additional households in the U.S. Indeed, the company targets building-out its fiber optic network to bring its availability to over 1 million residential households and business locations in the near future, serving ‘hundreds’ of communities.

MetroNet’s competitive advantage is the company’s ability to build its fiber network rapidly and in a cost-efficient manner. More precisely, MetroNet can build fiber infrastructure at a cost of less than $800 per passing.

KKR – Overview

KKR is making the investment into MetroNet through its $7.4bn Global Infrastructure Investors III Fund. Overall, KKR has significant global experience in fiber infrastructure. Specifically, this includes investments in FiberCop in Italy, Hyperoptic in the UK, Deutsche Glasfaser in Germany, Telefónica’s fiber InfraCo in Chile, and Open Dutch Fiber in the Netherlands.

Oak Hill Capital – Overview

Oak Hill Capital, a private equity firm, has amassed $16bn+ of capital commitments and co-investments to its funds, since inception. The firm owns its stake in MetroNet through its $3.8bn Oak Hill Capital Partners V Fund.

Additionally, Oak Hill is a notable investor in fiber broadband across the United States. Specifically, the firm has interests in Vexus Fiber (Texas, surrounding states), Future Fiber (Northeast), and Race Communications (California, surrounding states).

Transaction Advisors – MetroNet, Oak Hill and KKR

MetroNet’s financial advisors were Bank Street and Goldman Sachs. Additionally, MetroNet’s legal advisors were Paul, Weiss, Rifkind, Wharton & Garrison and Polsinelli.

Oak Hill’s financial advisor was TD Securities. Additionally, KKR’s legal advisor was Simpson Thacher & Bartlett.

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