Private equity firm to invest $230M in Mercury Broadband

Private equity firm Northleaf Capital Partners will acquire a controlling interest in Mercury Broadband and invest up to $230 million in the company over the next several years. Mercury Broadband CEO Garrett Wiseman said the influx in capital will allow it to expand its fixed wireless access (FWA) and fiber services more aggressively in the Midwest.

Mercury’s plans include deploying hundreds of FWA sites and 12,000 miles of fiber in select markets in Kansas, Indiana, Missouri, Michigan, Ohio and Illinois. The company has already deployed about 500 FWA sites using Citizens Broadband Radio Services (CBRS) spectrum with gear from Samsung and T3 Broadband.   

Mercury also won $68.3 million in the FCC’s Rural Digital Opportunity Fund (RDOF) reverse auction to help fund its broadband expansion.

Private equity firms such as Northleaf are investing in broadband companies like Mercury to help expand broadband to rural markets where the existing telcom providers don’t have incentive or interest in building their own fiber networks. These companies are considered appealing investments because they promise recurring revenue that isn’t vulnerable to rising inflation.

Northleaf isn’t alone. PE firm Grain Management, which was founded in 2007, also is focusing much of its investment in broadband and telecom infrastructure. Grain’s current portfolio includes investments in several smaller regional fiber providers such as Hunter Communications, which provides broadband service in Northern California and Southern Oregon, and Summit Broadband, a telecom provider in Florida. In addition, iCON Infrastructure Partners purchased a 57% stake in Dobson Fiber earlier this year.  It also owns TruVista, a broadband, video and voice provider in South Carolina.