Australian fund manager AMP Capital acquired its first US fibre-optic internet developer, committing more than $200 million in equity to fully purchase Ohio-based Everstream Solutions, Infrastructure Investor understands.
AMP Capital, a mid-market investor based in Sydney, Australia, purchased Everstream from M/C Partners, a telecoms and IT-focused private equity firm, as well as investors advised by JPMorgan Asset Management and Morgan Stanley Alternative Investment Partners.
The firm did not disclose the purchase price. Dylan Foo, AMP Capital’s head of Americas infrastructure equity, would only tell Infrastructure Investor their equity contribution was “within our target mid-market strategy where we seek assets between $100 and $400 million”.
Everstream has built and operates more than 10,000 route miles of fibre-optic cables throughout the midwestern US, according to a statement. Foo said this network was originally built and partially financed using government grants, giving Everstream’s assets a competitive advantage in the private market.
“Having 10,000 miles of fibre network in dense metro areas provides a strong competitive edge, replicating that network today would be cost-prohibitive,” Foo explained.
He declined to say if AMP Capital invested through a fund. The firm closed its Global Infrastructure Fund in January 2017 on $2.4 billion. As of 31 December 2017, AMP had $146.8 billion in funds under management.
The Everstream deal shows the increasing opportunity investors see in communications infrastructure, especially in the nascent fibre-optic subsector, according to Foo. He said consolidation is occurring in the space, which is improving the value of businesses like Everstream.
“The sector is becoming increasingly consolidated,” Foo said of the fibre-optic space, “we feel very bullish around it and the overall requirements for communications infrastructure in modern society.”
For AMP Capital, Everstream will serve as a platform for the consolidation of telecom assets in North America. Its investment in the company will be used for acquisitions and to fund organic growth and development, according to the statement. The transaction is expected to close in the second quarter of 2018.
Other recent private equity investments in the US fibre space include Antin Infrastructure Partners’ acquisition last month of FirstLight Fiber from Oak Hill Capital Partners, and last August, EQT Infrastructure purchased a majority share of Spirit Communications.
In another move to bolster its US market position, AMP announced on Monday the promotion of two senior members of its infrastructure debt team. Spencer Ivey takes on the role of principal of AMP’s infrastructure debt group in North America, while Evan Nahnsen was promoted to director. Roopa Murthy, based in London, was also promoted to principal of AMP’s infrastructure debt team in Europe.
Last August, the firm held a $2.5 billion final close on AMP Capital Infrastructure Debt Fund III, exceeding its $2 billion target.