Lightower Fiber Networks, a Boxborough firm that operates high-speed data networks throughout the Northeast and Midwest, has agreed to merge with Fibertech Networks of Rochester, N.Y., in a deal valued at $1.9 billion.
The companies build networks of optical fibers then sell access to a variety of businesses, including wireless phone companies, which connect their cell towers to the networks to distribute voice and data traffic. Other businesses rent bandwidth to connect their offices, data centers, or media operations; Gillette Stadium uses a Lightower fiber cable to transmit the video feed of New England Patriots games.
The merged companies will operate a 30,000-mile fiber network connecting 5,000 cellphone towers and 13,000 service locations, including commercial buildings, data centers, and financial exchanges.
Both companies are privately held but combined would have revenues approaching $700 million. Lightower has 510 employees, 260 in Massachusetts; Fibertech employs about 350. Lightower chief executive Rob Shanahan will lead the merged company, which will retain the Lightower name.
Roopashree Honnachari, an analyst at Frost & Sullivan in Houston, said Lightower and Fibertech “have almost similar types of offerings, but in different regions. This merger adds to the footprint that Lightower has, so they can sell to more areas, more regions, more customers.”
Shanahan said acquiring Fibertech’s network, which serves midsize communities in the East and Central United States, will bulk up the Lightower network. This should help the company compete against rivals like Zayo Group, a publicly traded Colorado company with more than 80,000 miles of fiber cable.
Lightower was formerly a unit of National Grid, a British utility company that provides gas and electric service throughout the Northeast. In 2007, National Grid sold Lightower to venture investors Pamlico Capital and M/C Partners.
The all-cash deal will be financed with debt and equity investments from several of Lightower’s financial backers, including Berkshire Partners, Pamlico Capital, and ABRY Partners.