LightRiver exec says Grain acquisition opens new avenues for growth

Private equity firm Grain Management acquired multi-vendor fiber transport network integrator LightRiver from CVF Capital Partners and Plexus Capital for an undisclosed sum. Mike Jonas, president of LightRiver, told Fierce the deal will allow it to tap greater financial capabilities and provide strategic advantages as it seeks to grow its business both in the U.S. and abroad.

Founded in 1998, LightRiver focuses solely on the WAN, helping customers design and deploy fiber transport networks using gear from an array of vendor partners including big names like Ciena, Cisco, Infinera and Nokia. It also provides its own open software automation platform to help manage the multi-vendor networks it stands up.

In addition to serving telecom operators, the company also has a history of working with utilities, data centers and cloud companies. It currently has around 150 customers, including several FAANG clients, tier 1 and tier 2 telecom companies and a majority of the top 20 investor-owned utilities.

According to Jonas, LightRiver’s previous investment partners provided it with a “very strong backstop” of support, backing its purchase of management software company Unique Computer Services in 2017 and helping the company build better internal financial processes. But graduating from a more generalized investment partner to one like Grain which specializes in telecom will allow it to leverage key industry expertise and contacts, he said. 

Grain previously invested in a number of fiber broadband providers including Hunter Communications, Summit Broadband, Ritter Communications and Great Plains Communications, as well as telecom construction services provider Y-COM.

“The depth that they have on the bench of people who have worked anywhere from the regulatory side to the operator side to the manufacturer’s side gives us a sounding board, gives us another group of business development experts” to talk with about products and solutions, Jonas explained. “And certainly the contacts that they have in the industry are going to be valuable. So, they will give us access to maybe folks we didn’t know.”

As a private company, LightRiver doesn’t disclose its financials. However, Jonas said the company has grown revenue at a rate of 18% to 20% annually over the past several years and doesn’t see that slowing down anytime soon. Among other growth avenues, the company is looking to expand its international business, offer connectivity within rather than just to data centers and potentially partner with more rural, cooperative and municipal utilities as broadband funding from the government incentivizes them to deploy their own networks. Its new partnership with Grain should help in all those areas, he said.

Jonas added it is looking to capitalize on trends around open and disaggregated networking as well. “Historically the vendors could do a good deal of this themselves, especially for the large customers. Well, where we’re evolving to is you might have four or five or six vendors in a transport network now that are each interoperable, technically interoperable,” he explained.

In that environment, a company like LightRiver that has the know-how to plug that equipment together, automate and support it can become a “strongly enabling partner for any of the folks who want to move into a disaggregated network. And today that is the data center, that is the cloud, that is the large service providers, that is anybody doing 5G.”