Cox Communications said Tuesday that it has agreed to purchase the commercial enterprise and carrier business of fiber company Segra from private equity company EQT Infrastructure. Terms of the deal were not disclosed, although some published reports put the value of the deal at around $3 billion.
Segra, based in Charlotte, North Carolina, is one of the largest privately held infrastructure providers in the country. As part of the deal, EQT will retain Segra’s residential and small-to-medium sized business segment in Virginia and North Carolina. Cox will acquire Segra’s commercial services segment, which serves commercial enterprise and carrier customers in nine states in the Mid-Atlantic and Southeast.
“Cox is focused on buying and investing where it makes sense, and we believe that the demand for broadband infrastructure will continue to grow, making fiber an attractive area for long-term investment,” said Cox president and CEO Pat Esser in a press release. “Acquiring Segra’s commercial services business is another key milestone in our pursuit of strategic infrastructure to ensure that we're providing the best products and services to our customers.”
Blomberg first reported Monday that Cox and EQT were in talks concerning Segra, estimating that the deal, including assumed debt, would be worth about $3 billion.
This is the latest in a string of fiber network infrastructure investments Cox has made over the years, including EasyTel, EdgeConneX, InSite Wireless, StackPath, Unite Private Networks and ViaWest. Once the deal is closed, the enterprise and carrier unit will retain the Segra name and its existing management team, operating as a standalone business within the Cox family of companies.
“Our relationship with Cox will allow Segra to leverage expert resources, capabilities and strategic insights in order to scale up operations and accelerate long-term growth,” Segra CEO Timothy Biltz said in a press release. “Cox and Segra are equally devoted to the communities we serve. We will be even more strongly positioned to meet growing demand from carrier and enterprise customers for high-bandwidth fiber-infrastructure solutions. I would also like to thank EQT for its continued guidance and invaluable support as we worked to grow the business over the last nearly four years.”
Bank Street Group LLC and Goldman Sachs and Co. LLC acted as financial advisors and Simpson Thacher & Bartlett LLP acted as legal advisor to Segra in connection with the transaction.
Fitch Ratings said debt ratings for Cox Enterprises and Cox Communications would not be affected by the transaction. Cox Enterprises has ample cash on hand after selling a majority stake in its TV and radio stations to Apollo Global Management in 2019, Fitch noted, and Cox Communications was expected to "continue to invest in strategic growth opportunities through its Cox Business segment." The deal enables Cox to exploit its fiber infrastructure and "address the overall growing demand for high capacity fiber in the commercial enterprise and carrier segment. It also allows CCI to continue its efforts to expand its addressable market footprint both organically and inorganically," Fitch said in a statement.
