Boston-based buyout firm Berkshire Partners has agreed to pay $2 billion to acquire Lightower Fiber Networks and Sidera Networks and then merge the two companies to form a fiber-optic network operator serving 6,000 locations.
Boxborough, Massachusetts–based Lightower and New York–based Sidera both provide commercial clients such as data centers and financial exchanges with fiber-based communications networks that offer access to the Internet and private networks as well as cloud-storage and data-center services. Once Berkshire merges the two companies, their combined network will serve 6,000 locations and cover 20,000 miles in the Northeast, Mid-Atlantic, and Midwest regions.
The deal requires regulatory approval before closing, which is expected to occur in the second quarter of 2013. At that point, Lightower CEO Rob Shanahan will lead the combined company. Some of both companies’ current private equity investors will continue to be investors in the combined company, according to the announcement of the transaction by Lightower and Sidera. Those investors include Pamlico Capital, which is a leading investor in Lightower, and Sidera investor ABRY Partners.
(ABRY Partners, also based in Boston, teamed up with Berkshire on another communications deal last year, with the buyout firms buying The Telx Group Inc. from GI Partners for an undisclosed amount.)
Berkshire Partners has turned to frequent counsel Ropes & Gray for advice on the multifaceted transaction. Boston-based private equity partner Taylor Hart is leading a Ropes team that also includes finance partner Sunil Savkar.
Hart was part of a Ropes team advising Berkshire Partners, along with Advent International and Bain Capital, two years ago on the $1.1 billion purchase of Irish electronic education company SkillSoft. Ropes also advised a Berkshire Partners–led investment group in 2010 on its $820 million sale of locomotive manufacturer Electro-Motive Diesel Inc. to Caterpillar Inc.
Berkshire Partners has enlisted Covington & Burling for advice on regulatory aspects of the deal. Washington, D.C.–based communications and media partners Mace Rosenstein, Yaron Dori, and Matthew DelNero are working on the matter for Covington.
Berkshire Partners’s general counsel is Shar Heslam, a former corporate partner in the Boston office of Weil, Gotshal & Manges who joined the private equity firm in 2006.
Edwards Wildman is serving as Sidera’s outside counsel in connection with the sale. The firm’s team includes business law partners Peter Barrett and Thomas “Jeff” Jefferson IV, in Providence, as well as corporate partner Louis Mercedes, in Boston. Sidera’s general counsel is Paul Eskildsen.
A source close to the transaction tells The Am Law Daily that Alston & Bird is advising Lightower on the transaction. Two Alston & Bird spokeswomen were not immediately available for comment. Dave Mayer serves as Lightower’s general counsel.