Ridgemont Equity Partners is to acquire a majority interest in Cross River Fiber, a provider of dark fibre and communications infrastructure-based services.
The proposed transaction is expected to close in the fourth quarter of 2014, following the satisfaction of customary regulatory closing conditions.
The agreement has been approved by both Cross River’s board of directors and Ridgemont. Financial terms of the transaction were not disclosed.
The company’s senior management team will retain a substantial ownership stake and remain in their current roles at the Summit, New Jersey, headquarters. Under the leadership of Cross River’s CEO Vincenzo Clemente, Cross River’s existing management team will partner with Ridgemont to drive the next phase of the company’s growth.
The investment will bolster Cross River’s expansion of its dark fibre network into new geographic markets by capitalising on the increasing demand for high-capacity, carrier-class bandwidth services by the company’s customers in the financial, carrier, education, healthcare and enterprise sectors.
“Our partnership with Ridgemont will help ensure that Cross River has continued access to capital for growth as well as broader access to strategic and financial resources. The existing management team will continue to lead and manage the business and there will be no major changes to our day-to-day business operations,” says Enzo Clemente, CEO of Cross River. “Ridgemont has a terrific track record of investing alongside management teams in high-growth sectors within the communications infrastructure arena, making them an ideal partner in helping us expand our market opportunities and enhance our current business momentum.”
“This transaction will mark our partnership’s fifth investment in the metro fibre industry and we believe that Cross River possesses the qualities we look for most as investors – strong management, recurring revenue, operating leverage and growth,” says George Morgan, partner at Ridgemont. “Together, we are determined to utilise our combined experience to build a growing and high quality business.”
In conjunction with the closing, Webster Bank and CoBank will provide debt financing to support the transaction as well as future growth. The Bank Street Group served as Cross River’s exclusive financial advisor, Budd Larner served as legal counsel to Cross River and Alston & Bird served as legal counsel to Ridgemont.
