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Morgan Stanley Buys Big MSP Stake, Invests In Lightpath Fiber Network

Morgan Stanley Infrastructure Partners (MSIP) has acquired a big stake in Lightpath, a fiber optic network service provider and MSP that has a massive installed base across New York, New Jersey and Connecticut.

Under terms of the deal:

  • MSIP is acquiring 49.99 percent of the Lightpath fiber enterprise business from Altice for an implied enterprise value of $3.2 billion.
  • Take a closer look, and the deal’s valuation is a lofty 14.6 times fiscal year 2019 adjusted EBITDA, Altice financial data reveals.
  • Altice USA will retain a 50.01 percent stake in Lightpath, while receiving  total gross cash proceeds of approximately $2.3 billion from the sale and related financing activity.

Lightpath Network Services and Reach

Lightpath’s network services span data, Internet, unified communications, security and managed services.

The Lightpath network serves businesses across 21 states, but is best known in the New York Metropolitan Area — with reach into New Jersey and Connectivity. More than 15,000 commercial buildings are directly connected to Lightpath’s fiber network.

MSIP typically invests in power generation and utilities, natural gas, transportation, and digital infrastructure.

Lightpath Network Services: Executive Perspectives

It sounds like MSIP’s investment in Lightpath is the first of multiple forthcoming steps. In a prepared statement about the deal, Altice USA CEO Dexter Goei said:

“Lightpath is an expansive and best-in-class enterprise fiber communications business with tremendous long-term potential. Bringing in a strategic investor allows Altice USA to focus on operating our core businesses while infusing the capital needed to grow Lightpath and maximize shareholder value. We are pleased to partner with MSIP, a leading investor in telecommunications infrastructure with deep operational and management expertise, to propel Lightpath and unlock its future potential.”

Altice USA will share more details about the deal during the firm’s second quarter 2020 earnings presentation on July 30, the company said.

The deal is expected to close in Q4 2020 following customary regulatory approvals.

Fiber Optic Network Mergers, Acquisitions and Investments

Investment activity in the fiber optic network market has been steady to strong. ChannelE2E has tracked 15 M&A deals and investments involving fiber network service providers since 2016.

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