Oak Hill Capital, a New York-based middle-market private equity firm, today announced that it has agreed to acquire a majority interest in Greenlight Networks, LLC, a Rochester-headquartered fiber-to-the-home (FTTH) provider for Upstate New York. Specifically, the firm is investing through its latest vintage fund, Oak Hill Capital Partners VI (OHCP VI), and is replacing Greenlight Networks’ current financial sponsor, Impact Capital (Tom Golisano).

To this end, local press reports indicate that billionaire Tom Golisano (founder of Paychex) has invested $100m+ into Greenlight Networks’ fiber network deployment to-date.

Finally, the transaction is expected to close in spring 2022 (i.e., between March and May 2022).

Greenlight Networks – Overview

Greenlight Networks builds, owns, and operates a fiber-optic network that provides high-speed Internet connections to ~80k homes in 20 municipalities in the Rochester, Buffalo, and Binghamton areas of New York State.

Greenlight Networks Fiber Map
Note: map as of mid-2019. Green pins represent current availability and dark gray pins signify potential. Expand map.

Oak Hill’s new investment will accelerate Greenlight’s expansion of its fiber-to-the-home (FTTH) broadband network by “tenfold”, across New York state and the northeast U.S. For example, the company is in the process of extending its fiber-optic network in Monroe County, Ontario County, Erie County, Niagara County, Tompkins County, and other parts of New York’s Southern Tier.

Overall, the company plans to reach more than 800k homes with broadband Internet. To support this expansion, Oak Hill plans to invest up to $300m in the company.

Speed Tiers

Greenlight offers residential and small business customers fiber broadband packages with symmetrical speeds of 500 megabits per second (Mbps), 750 Mbps, 1 gigabit per second (Gbps), and 2 Gbps. These packages cost $50, $75, $100, and $200 per month, respectively.

Management and Employees

Greenlight Networks is led by Mark Murphy as CEO, who founded the company in 2011. Additionally, the existing Greenlight management team will continue to lead the company under Oak Hill’s ownership.

In total, Greenlight currently has 160 employees and expects to add 70 additional jobs by the end of 2022. Moreover, the company expects Oak Hill’s investment will create hundreds of new jobs, including employment opportunities for local contractors.

Government Support

Greenlight aims to expand Internet access in unserved and underserved cities and towns, where consumers either have limited or no choice for broadband. Importantly, the U.S. federal government has enhanced broadband benefits and made new capital available for broadband expansion in these unserved and underserved areas.

Accordingly, Greenlight intends to participate in these programs, including the Infrastructure Investment and Jobs Act. Currently, the company is a provider of the Affordable Connectivity Program.

Competitors

Greenlight Networks primarily competes with Charter Communications’ Spectrum brand and, to a lesser extent, Frontier Communications.

Transaction Advisors – Oak Hill, Greenlight Networks

Oak Hill’s financial advisor was TD Securities. Also, Greenlight Networks’ financial advisor was Bank Street Group.

Oak Hill Capital – Overview

Oak Hill Capital, a private equity firm, has amassed $19bn+ of capital commitments and co-investments to its funds, since inception.

Fiber Infrastructure

Since 2014, Oak Hill has made multiple investments in the fiber-to-the-home (FTTH) sector, supporting increased fiber access across the United States. Presently, Oak Hill is an investor in MetroNet / Vexus Fiber (15 states), Future Fiber (Northeast), and Race Communications (California, surrounding states).

Jonathan Kim covers Fiber for Dgtl Infra, including Zayo Group, Cogent Communications (NASDAQ: CCOI), Uniti Group (NASDAQ: UNIT), Lumen Technologies (NYSE: LUMN), Frontier Communications (NASDAQ: FYBR), Consolidated Communications (NASDAQ: CNSL), and many more. Within Fiber, Jonathan focuses on the sub-sectors of wholesale / dark fiber, enterprise fiber, fiber-to-the-home (FTTH), fiber-to-the-premises (FTTP), and subsea cables.

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