$2.38 million for each Fibertech employee
AUGUST 26, 2010
Fibertech Changes Private Ownership
By ANUPREETA DAS
Fibertech Networks LLC, which leases fiber-optic networks to businesses and wireless carriers in the eastern U.S., is changing private-equity owners in a deal valued at about $500 million.
Court Square Capital Partners, a New York-based investment firm, will buy Fibertech from Nautic Partners and Ridgemont Equity Partners, which was previously a part of Bank of America Corp.
Fibertech's investors put a total of $50 million into the company over two financing rounds, the company said. Founded in 2000, Fibertech operates one of the country's largest independently owned metro-area fiber-optic networks.
In recent months, many operators of fiber-optic networks have put themselves up for sale, seeking high prices as surging broadband Internet usage increases demand for these networks. Earlier this month, rural telecommunications provider Windstream Corp. bought Kentucky Data Link of Evansville, Ind., for $782 million. "It's clearly a reflection of what's happened with the uses on the [demand] side and applications of that fiber has been growing at really astounding rates," said Fibertech Chief Executive John Purcell in an interview.
Fibertech's business serving wireless carriers has grown from 5% of total revenues to 17% in the last 18 months, largely because mobile phones now use more data, he said. Fibertech will retain its 210 employees and plans to expand beyond its eastern U.S. stronghold under the new ownership.
A number of privately owned companies are also exploring a sale before expected tax increases start in 2011, Mr. Purcell said. There is likely to be a surge of so-called "secondary" buyouts—when one private-equity shop sells a company to another—in coming weeks, as firms rush to close deals before the year ends to avoid paying higher capital gains taxes.
Buyout firms are collectively sitting on some $500 billion in cash, and scouting for deals to put their money to work. At the same time, the firms also need to return money to their investors, which is compelling them to sell portfolio companies.
Write to Anupreeta Das at anupreeta.das@wsj.com
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