MetroNet announces new investments from Oak Hill Capital and KKR

Funds managed by leading global investment firm KKR will be joining long-time partner, Oak Hill Capital, and management as investors in MetroNet. As part of the transaction, Oak Hill and KKR will each make new investments to help accelerate MetroNet's growth in building and connecting fiber-to-the-premise (FTTP) data, television, and telephone services to homes and businesses. This year, MetroNet launched services in its ninth state as it continues to expand its fibre footprint to local communities across the country. 

"We value our long-standing partnership with Oak Hill and are proud to welcome our new investors at KKR," says John Cinelli, MetroNet CEO. "The additional investments from Oak Hill and KKR will drive growth that further bridges the digital divide by providing hundreds of thousands of additional households access to world class and future proof 100 per cent fibre optic services for living, learning, and connecting to each other. We look forward to maintaining our commitment to excellence in serving our customers and communities." 

MetroNet is one of the fastest-growing providers of fibre optic high-speed broadband services in the nation. The company is known for its superior customer service provided through a strong local presence. MetroNet delivers affordable symmetrical speeds of up to 10 Gbps to homes and businesses in underserved, small town America, and is credited with creating the largest Gigabit city in the US by fully wiring Lexington, Kentucky. MetroNet's state-of-the-art fiber optic network is built to the highest technical standards, with its existing infrastructure having supported reliable service over the past year when Covid-induced disruptions substantially increased the need for greater bandwidth for tele-work, school, health, and more. The company expects its network to be available to over 1 million residential households and business locations in the near future, bringing competition for these services to hundreds of communities. 

Oak Hill is an experienced investor in the FTTP space and has been a partner with the MetroNet team since 2014. Other Oak Hill broadband investments to enable increased fibre access in the US include Vexus Fiber, a rapidly expanding provider in Texas and surrounding states; Future Fibre Holdings in the Northeast; and Race Communications in California and surrounding states. 

"We believe that reliable, high-speed access to the Internet represents a fundamental underpinning of economic growth and equal opportunity for all Americans, from small towns to big cities," says Benjy Diesbach and Scott Baker, partners at Oak Hill.  "We are excited to build upon our seven year partnership with MetroNet's outstanding management team, led by John Cinelli, as the company expands its fiber network to many more underserved American communities." 

KKR will be making the investment in MetroNet through its global infrastructure strategy. The firm first established its global infrastructure strategy in 2008 and has since been one of the most active infrastructure investors around the world, currently managing over USD27 billion in infrastructure assets. KKR has significant experience investing in the growth of leading FTTP providers globally, including FiberCop in Italy, Hyperoptic in the UK and Deutsche Glasfaser in Germany. Most recently, KKR announced the creation of independent open access wholesale fiber optic network companies in both Chile and in the Netherlands. 

"MetroNet has set itself apart as the leading independent FTTP provider in the US, well-known for its high-quality technology, exceptional customer service and local operations," says Waldemar Szlezak, a senior leader on KKR's infrastructure investment team. "We are thrilled to be supporting MetroNet, alongside Oak Hill, on its mission to deliver much-needed broadband access across the US, a market that is well behind its peers in FTTP connectivity." 

The transaction is expected to close in the third quarter, subject to regulatory approvals and other customary closing conditions. Specific terms of the investment were not released. 

Bank Street Group LLC and Goldman Sachs & Co LLC served as co-lead financial advisors to MetroNet in connection with this transaction. Paul, Weiss, Rifkind, Wharton & Garrison LLP and Polsinelli served as legal counsel to MetroNet. TD Securities served as advisor to Oak Hill. Simpson Thacher served as legal counsel to KKR.