FirstDigital Telecom, a fiber-based carrier in the Western United States providing a full suite of business services including local voice, long distance, Internet, VoIP, colocation, and managed services, will receive $200 million of preferred equity from Apollo Global Management and its affiliates.
The strategic investment would help FirstDigital Telecom achieve its expansion goals, including its acquisition of Veracity Networks LLC today, which will make the company one of Utah’s largest fiber operators. Furthermore, the investment will provide liquidity for FirstDigital to support its longer-term growth objectives.
Veracity Networks is a fiber-based and cloud communications service provider located in Lindon, Utah. The acquisition expands FirstDigital’s fiber reach giving the company one of the largest private fiber footprints in Utah. Financial terms of this acquisition were not disclosed.
“We see strong growth opportunities across our full suite of telecommunications services and are confident that the strategic investment by the Apollo Funds will support a transformative period for our company, starting with the integration of Veracity Networks,” said Wesley McDougal, Founder, President and CEO of FirstDigital. “Apollo knows our business and industry well, and we’re excited to have their support as we continue to build our network, solutions and high-capacity services for our business customers.”
“Utah has undergone extraordinary growth, making the acquisition of Veracity Networks and its strong presence in Utah the perfect complement to our existing Utah network,” added Mr. McDougal. “We’ve had a longstanding relationship with the Veracity team. This is a tremendous opportunity to combine forces and create something special in the state of Utah. We look forward to continue delivering Utah-area businesses with the high-capacity, services they’ve come to expect from their fiber network provider.”
The acquisition of Veracity Networks follows FirstDigital’s recent purchase of Level 3/CenturyLink’s metro network assets across southern Arizona. “FirstDigital looks forward to maintaining Veracity’s strong customer base,” added McDougal. “We’re excited to continue our growth by providing our customers a telecommunications platform that enables their success and continues to expand the FirstDigital fiber network throughout the Western United States.”
Apollo is a high-growth, global alternative asset manager. As of March 31, 2021, Apollo had approximately $461 billion of assets under management.
“FirstDigital is a leading fiber operator in the southwest region, and we’re excited to leverage our telecoms infrastructure expertise and capital to help the company grow,” said Dylan Foo, Senior Partner and Co-Head of Infrastructure at Apollo. “This investment provides FirstDigital with greater financial flexibility and strategic advice to bolster their position within the dynamic and competitive telecommunications industry, especially at a time where bridging the national digital divide is more important than ever. We look forward to supporting Wesley and his team, helping fuel the Company’s long-term growth plans.”
Apollo’s Andrew Kirby, Principal in Infrastructure Private Equity at the company, added: “Against a backdrop of strong industry tailwinds, we believe that FirstDigital is well positioned to capture a substantial market opportunity. This investment underscores our belief in the leading role that fiber operators will play in providing critical connectivity to enterprises and communities alike.”
This investment builds on Apollo’s 30-year track record of investing more than $20 billion in infrastructure-related opportunities across its platform through Apollo-managed funds. The infrastructure division of Apollo is presently investing from its second dedicated infrastructure fund. The infrastructure team, led by Senior Partners Dylan Foo and Geoff Strong, focuses on communications, electricity and renewables, transportation, and midstream energy.
The Apollo Funds were advised financially by Evercore and legally by Simpson Thacher & Bartlett LLP. Houlihan Lokey served as FirstDigital’s finance advisor, while Parr, Brown, Gee & Lovelace served as its legal advisor.