- The reasoning behind the combination is: there are advantages to scale
- The combined company — Rightfiber — will serve more than 300,000 locations
- Rightfiber plans to continue deploying more fiber broadband
The private equity firm Grain Management is combining two of its fiber operators — Ritter Communications and Great Plains Communications — into one entity called Rightfiber.
Heath Simpson, currently CEO of Ritter Communications, will serve as CEO of Rightfiber, and Todd Foje, currently CEO of Great Plains Communications, will serve as executive chairman.
Foje told Fierce Network that the reasoning behind the combination is there are advantages to scale. “Our network is going to become a 20-state regional network that opens up additional opportunities with hyperscalers, wireless customers and others,” he said.
The bigger scale also gives Rightfiber easier and less-expensive access to capital and stronger buying power with suppliers. Those financial benefits will, in turn, allow the company to make more investments in information technology and cybersecurity. “We can spread that expertise and investment across a larger organization, so it creates efficiencies from that standpoint,” said Foje.
Great Plains has been owned by Grain since 2018, and Ritter is majority owned by Grain. After the combination, Grain will be the largest shareholder, by far, but the Ritter family will still own a stake.
Together, Rightfiber will serve more than 300,000 locations with its combined 28,000-route-mile fiber network.
Great Plains Communications is based in Blair, Nebraska, and serves nearly 200 communities across states, including Colorado, Indiana, Iowa, Kentucky and Nebraska. Ritter Communications is based in Jonesboro, Arkansas, and serves 197 communities in states including, Arkansas, Tennessee, Texas, Missouri, Kentucky, Louisiana and Oklahoma.
Rightfiber is tentatively planned to be based in Little Rock, Arkansas. But a lot of employees at both companies work remotely and will continue to do so.
Rightfiber plans to continue deploying more fiber broadband. In fact, Foje said the company will pursue “a very aggressive growth plan” to create a lot of new value.
“You just have to choose your markets and your locations very thoughtfully and carefully,” he said. “There's no point in being the third or fourth company in a market. Certainly being the first with fiber is the preferred position, being second is okay in many cases, but being third and fourth — that doesn't really serve anybody very well in terms of rewarding investment.”
Great Plains has about 400 employees, and Ritter has about 450. Fierce asked whether there will be layoffs after the merger.
Foje said, “We’re unsure. We know that there's going to be some duplication that we'll want to eliminate. But at the same time, with our growth, we know that we'll be adding positions in some areas, so those decisions will be made over the next several months.”
Simpson said in a statement: “Ritter and Great Plains share a deep commitment to customers, communities and our amazing employees. By coming together, we are building on the strengths of both organizations to create new opportunities for growth while continuing to deliver the fast, reliable services and local relationships our customers value.”
In addition to the CEO and executive chairman of RightFiber, the management team has been selected, but Grain is not yet announcing the specifics.
The merger is pending regulatory approvals and will be finalized after those are completed, which is expected within the next 90 days or so.
Fiber consolidation
There’s been a lot of consolidation among fiber providers in the U.S., and more is expected.
Foje noted that Grain Management is a private equity company, and it “will want to exit at some point,” he said, “because they are, you know, professional investors.”
But he said the Rightfiber business “is an opportunity to create value for the foreseeable future.”
In terms of the fiber broadband business in general, Foje said, “I certainly think there'll be ongoing consolidation because there are benefits to scale in this business. It's a very capital-intensive industry, so being able to access capital on attractive terms and conditions is very important for growth.”