Partnership between Tech Valley Communications and segTEL furthers objective of building leading fiber footprint throughout the Northeast.
BOSTON, MA – Riverside Partners, a Boston based private equity firm, announced today that it has entered into an agreement to make a significant investment in segTEL, Northern New England’s leading provider of competitive fiber optic telecommunication services. The investment will enhance and accelerate the rapid growth of segTEL’s ultra-high capacity, low latency, carrier-grade fiber optic network. segTEL is headquartered in Lebanon, New Hampshire.
The investment will be made through Riverside Partners’ portfolio company, Tech Valley Communications. segTEL’s current owners will become the second largest shareholder in the combined company and their management team will continue in their current roles. Financial terms of the investment were not disclosed, The transaction is expected to close following regulatory approvals in approximately 45 days.
Founded in 1998, segTEL provides fiber optic telecommunication services to carrier, wholesale, and large enterprise customers throughout New Hampshire, Vermont, Massachusetts and Maine. segTEL has unique and extensive expertise in providing customized fiber optic loop, backhaul and transport services to Top-25 wireline and wireless carriers, which complements Tech Valley’s strong presence in the enterprise market. segTEL’s fiber-optic network reach is anticipated to exceed 100,000 fiber-miles by the end of September, 2011.
Tech Valley Communications was founded in 1999 and owns and operates an extensive fiber optic network throughout New York’s “Tech Valley”, serving most of the region’s leading enterprises. Tech Valley Communications offers a full range of last mile and high capacity enterprise and carrier services on one of the region’s deepest fiber networks. Tech Valley’s fiber network exceeds 32,000 fiber-miles and services over 500 fiber lit buildings in the Tech Valley region, including most major state facilities, health care and educational institutions, and the Company has received a New York State Public Service Commission’s Commendation for Excellent Service each of the past seven years. Riverside Partners invested in Tech Valley in October, 2010.
“segTEL has received tremendous market response to our product suite over the past 36 months”, said Jeremy Katz. “Demand has exceeded all expectations and has continued to escalate. Among our many options for financial partners, Riverside Partners stood out head and shoulders above the rest. The Riverside team demonstrated profound understanding of growth markets, entrepreneurial spirit and the drive and resources needed to succeed in a rapidly growing and evolving technology environment.”
Mr. Katz will assume the role of Executive Vice President of the combined business and President of segTEL. segTEL’s founder, Steve Goldsmith will continue as its Chief Technology Officer. All other segTEL management and field operations staff will continue their operational activities within the new corporate structure.
“This investment is a great example of the value-added approach that led us to partner with Riverside Partners originally,” said Kevin O’Connor, Chief Executive Officer and co-founder of Tech Valley Communications. “In the seven months since their investment, Riverside has supported us with the capital, resources and strategic insight necessary to support our growth plans. Our network expansion started the day after the Riverside investment and the new routes are already serving premier wholesale, enterprise, MDU and retail customers. Now, less than a year into our partnership with Riverside Partners, we are being supported by the substantial investment necessary to build the leading fiber footprint across the Northeast.” O’Connor continued, “The cultural fit between the two companies is very strong and we look forward to working with Jeremy and Steve’s team to expand their carrier-grade fiber platform wider and deeper throughout the Northeast.”
“We are very excited about the growth potential created by the combination of Tech Valley and segTEL,” said Steven F. Kaplan, a General Partner at Riverside Partners. “Jeremy and Steve are true entrepreneurs and technology visionaries. They understand industry trends, the needs of their customers, and have a reputation for technological innovation and meticulous attention to quality. They have built a strong team and the largest competitive fiber network in Northern New England. We are thrilled to be working with them going forward. The partnership between the two businesses will expand geographic reach and deepen relationships with wholesale, carrier and large enterprise customers and is expected to propel their market positions as the businesses are able to offer customers more extensive services across a broader coverage area. Both companies enjoy reputations in the market that are simply outstanding.”
Q Advisors LLC, a Denver and San Francisco based investment banking boutique, acted as exclusive financial advisor to segTEL in connection with the transaction.
About Tech Valley Communications
Tech Valley Communications, headquartered in Albany NY, is the region’s preeminent provider of telecommunication services over its advanced FirstLight® fiber optic network. Focusing on business enterprise and high demand customers, Tech Valley Communications owns and operates a fiber network of over 32,000 fiber-miles connecting hundreds of office buildings and data centers serving leading enterprises and institutions throughout the Tech Valley Region of Upstate New York. For more information, please visit http://www.techvalleycom.com
About Riverside Partners
Founded in 1989, Riverside Partners is a middle market private equity firm currently investing Riverside Partners Fund IV, L.P. The fund focuses on growth oriented companies primarily in the healthcare and technology industries. Riverside Partners is particularly experienced at partnering with founders, owners and management teams and it brings substantial domain expertise and operating experience to its portfolio companies. The partners at Riverside Partners have managed more than $500 million in investments in over 50 companies. The firm is currently focused on companies with revenues between $20 and $200 million and with $5-$25 million of EBITDA. For more information, please visit http://www.riversidepartners.com
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