MetroNet, Vexus CEOs say merger gives them the scale to speed fiber builds

Regional operators MetroNet and Vexus Fiber announced plans to merge, a move the CEOs of both companies told Fierce will provide them more leverage in both the supply chain and financial markets. Terms of the deal were not disclosed.

MetroNet’s footprint currently spans 13 states including Florida, Illinois, Indiana, Iowa, Kentucky, North Carolina, Michigan, Minnesota, Missouri, Ohio, Texas, Virginia and Wisconsin. Vexus Fiber, meanwhile, operates in Texas, Louisiana and New Mexico. Together, the companies will cover a total of 15 states.

John Cinelli, CEO of MetroNet, told Fierce that post-merger, the idea is for the companies to continue running independently but in parallel, with Vexus CEO Jim Gleason retaining his current role. There are no immediate plans to merge the two brands, he added, since both have a good reputation with consumers.

In terms of product alignment, both MetroNet and Vexus already offer 1-gig plans. The CEOs said their respective networks have up to 10-gig capacity currently, meaning they have the ability to match or exceed the 2-gig and 5-gig offers that other operators are starting to roll out. Gleason said the question at this stage is how to productize and price such offers.

RELATED: MetroNet poaches Shentel COO as it plots rapid growth

Rather than one company swallowing the other whole, Cinelli said the whole idea behind the deal is that the pair can do a lot more together than apart, specifically when it comes to purchasing materials and approaching the financial markets.

“One of the things we’re very concerned about is supply chain. And so it’s nice to be a larger customer because you command more attention from the fiber companies, from the companies that provide our PON infrastructure, and then all the other things that we buy,” he explained. “So that’s part of it. One of the big parts for us is to make sure that we’re securing our supply chain as a result of being a larger organization together.”

RELATED: Vexus Fiber ramps rollouts to reach 10k new locations per month

Gleason added “the financial power that the combined entity brings together in terms of financing the fiber builds that we’re going forward with is really beneficial as well.” For instance, with higher revenue and EBITDA, it will be able to take advantage of more attractive credit and loan products such as Term B financing.

The CEOs noted both MetroNet and Vexus are ramping up their fiber builds. In terms of growth targets, Cinelli said the pair are hoping to achieve “multiples of the size of our [combined] company over the next three to five years.”