Cox Agrees to Buy Enterprise Unit of EQT’s Fiber Provider Segra

Cox Communications Inc. said it would buy the commercial unit of the U.S. fiber provider Segra, which is backed by private equity firm EQT AB.

Terms of the deal weren’t disclosed in statements Tuesday by Cox and EQT that confirmed an earlier Bloomberg News report. People familiar with the matter said the transaction valued the Segra division at more than $3 billion, including debt.

“Demand for broadband infrastructure will continue to grow, making fiber an attractive area for long-term investment,” Cox Communications Chief Executive Officer Pat Esser said in his company’s statement.

The sale affects only Segra’s division catering to business customers. The company, based in Charlotte, North Carolina, is keeping its residential business.

Stockholm-based EQT formed Segra in 2019, merging Lumos Networks and Spirit Communications to form the re-branded company, Segra’s website shows.

EQT Partner Jan Vesely said in an interview that the exit is one of the firm’s largest ever from a fiber investment, without disclosing the returns.

Defensible Business

EQT is a large global private equity firm with more than 67 billion euros ($81 billion) of assets under management across 26 active funds, according to its website. Key to that growth has been the development of its infrastructure funds, which have have invested in North American telecommunications, fiber and data centers through companies such as Zayo and EdgeConneX.

Vesely said his firm likes investing in fiber because it’s driven by consumer trends such as ever increasing demand for better connectivity at home and in the office.

“It’s a very defensible business,” Vesely said, referring to internet service. “It’s become more essential than having water.”

Fiber has also become a hot commodity for private owners. Blackstone Group Inc. is in talks to acquire a stake in Florida-based fiber network company Hotwire Communications, Bloomberg News reported this week.

EQT has also been exploring a takeover of Dutch phone company Royal KPN NV, Bloomberg News reported last year.

Infrastructure V Fund

EQT said last month that its Infrastructure V fund would reach a hard cap of 15 billion euros this year, citing “strong support from both new and existing investors.”

Atlanta-based Cox is the third-largest U.S. cable provider and the biggest division of privately held Cox Enterprises Inc., according to its website. Family-controlled Cox Enterprises was founded in 1898 by Ohio Governor James M. Cox. It generates $20 billion in annual revenue, according to its website, and also owns brands Kelley Blue Book and Autotrader.

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