Lightpath, an enterprise fiber business jointly owned by Morgan Stanley Infrastructure Partners (MSIP) and Altice USA, today announced its entrance into the Boston market for fiber connectivity solutions, through three acquisitions. Specifically, Lightpath’s three acquisitions include: i) Cambridge Network Solutions (CNS), ii) a second connectivity provider in the area, and iii) fiber network assets from Hub Fiber.

Lightpath will fund all three transactions with cash on its balance sheet. To-date, the company has closed two of its three acquisitions, with the remaining purchase of assets from Hub Fiber expected to close within 30 days.

On the company’s Q1 2021 earnings call, Altice USA’s CEO Dexter Goei noted that Lightpath’s edge-out M&A transactions comprise “less than $40m” in total.

Boston Fiber Acquisitions – Overview

Collectively, Lightpath acquired 80+ fiber route miles which have a high strand count. Presently, this fiber serves 100+ locations, including 12 data centers, throughout Boston, Cambridge, Somerville, Waltham, Burlington, Billerica, Bedford, and Lowell.

Additionally, Lightpath’s Boston network will connect to its New York metropolitan area network. In turn, this Boston network will grow the company’s existing 18.0k fiber route miles, serving 12.0k+ locations.

Lightpath Fiber Network Map

Overall, Boston represents Lightpath’s first step in scaling beyond its New York metropolitan area stronghold, where it serves thousands of customers. Under the joint ownership of Morgan Stanley and Altice, Lightpath has been actively seeking out entry into new Tier-1 enterprise fiber markets, such as Boston, as part of its growth strategy.

Cambridge Network Solutions (CNS)

Cambridge Network Solutions (CNS) represents the most significant of Lightpath’s three acquisitions. Indeed, CNS offers high-capacity fiber throughout downtown Boston, the Seaport District, Cambridge, and surrounding areas.

Also, CNS has established rights-of-way and construction capabilities. Accordingly, CNS will enhance Lightpath’s ability to build new fiber networks into additional service locations, as well as expanding its network to additional areas.

Target Customers

Lightpath intends to offer a new choice for enterprise fiber connectivity to Boston Area customers. Specifically, the company will target customers in the sectors of technology, biotech, financial services, universities & research institutes, and government.

Competitors

Notable competitors to Lightpath’s enterprise fiber business in Boston include Crown Castle, FirstLight, AT&T, Verizon, Lumen Technologies, Zayo, and Comcast.

Fiber Services – Lightpath

Lightpath will offer Boston area enterprises its entire portfolio of fiber solutions. Particularly, these services include optical transport, ethernet, Internet access, private networks, dark fiber, SD-WAN, and other managed services.

Importantly, Lightpath is extending beyond its historical enterprise customer focus into wholesale and carrier digital infrastructure opportunities (i.e., dark fiber).

Additionally, enterprises will be able to leverage Lightpath’s services to connect between Greater Boston and the New York metropolitan area. Indeed, this includes over 65 New York metropolitan area data centers, eight cable landing stations, and all major cloud service providers.

Financial Performance in Q1 2021 – Lightpath

In Q1 2021, Lightpath reported revenue growth of 2.4% year-over-year. Additionally, the company generated EBITDA for the last twelve months of $218m and L2QA EBITDA of $220m. Therefore, Lightpath’s EBITDA remains unchanged from its $219m level when Altice USA sold 49.99% of the company to Morgan Stanley.

During Q1 2021, Lightpath noted that it is finding success with customers in the education and healthcare verticals. In particular, these customer wins are stemming from elevated connectivity needs as a result of the pandemic.

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