(Bloomberg) -- T-Mobile US Inc. is investing $4.9 billion in a joint venture with private equity firm KKR & Co. to buy fiber-optic internet service provider Metronet.
The No. 2 US wireless carrier will use Metronet’s digital and fiber infrastructure to expand to more households with fiber broadband services, according to a statement on Wednesday.
Metronet, based in Evansville, Indiana, is owned by Oak Hill Capital and the Cinelli family. KKR has been a a minority investor in the company since 2021. Oak Hill will re-invest in the joint venture to retain a minority position and founder John Cinelli will also retain a minority stake once the deal closes.
T-Mobile has been challenging the broadband industry by expanding into fiber networks. In April, the company acquired fiber-to-the-home platform Lumos in a joint venture with investment firm EQT AB. T-Mobile offers fiber service in eight states including California, New York and Illinois.
Metronet’s fiber network reaches more than 2 million households in 17 states. The company is expected to reach 6.5 million homes by the end of 2030, according to the statement.
“This is a unique opportunity and a smart, capital-efficient deal that enables T-Mobile to profitably build on our success in broadband” and complement the company’s wireless growth strategy, Mike Sievert, chief executive officer of T-Mobile, said in the statement.
The transaction is expected to close in 2025, subject to customary closing conditions and regulatory approvals.
©2024 Bloomberg L.P.