Mubadala to invest US$500 million in U.S. broadband company Brightspeed, alongside Apollo Funds

Mubadala to invest US$500 million in U.S. broadband company Brightspeed, alongside Apollo Funds

ABU DHABI, 2nd May, 2023 (WAM) -- Brightspeed, a broadband and telecommunications services company based in the United States, has announced that it has secured a $500 million investment from Mubadala Investment Company, the sovereign investor of Abu Dhabi.

With this investment, Mubadala will become a minority shareholder in Brightspeed, joining investment funds managed by affiliates of Apollo Global Management, Inc.

Brightspeed, headquartered in Charlotte, North Carolina, is currently the fifth-largest incumbent local exchange carrier (ILEC) in the U.S. The company has the capability to serve over 6.5 million homes and businesses in rural and suburban communities across the U.S. Midwest, Southeast, Pennsylvania, and New Jersey.

Brightspeed began operations officially in October 2022 and started the build-out of its state-of-the-art fiber optics network. The company began serving its first fiber customers in March 2023, and its planned fiber optics transformation is expected to reach up to 3 million homes and businesses over the next five years. This includes locations where fiber and advanced technology have not historically been deployed.

With the rise of cloud services, video streaming, IoT applications, and 5G technologies, the demand for faster, reliable connectivity is rapidly increasing. Companies like Brightspeed play a critical role in providing essential digital infrastructure solutions.

Brightspeed's ambition is to help bridge the digital divide by providing high-speed, dependable internet connectivity to communities where access to fiber internet and advanced technology has historically been limited. This investment from Mubadala will accelerate the company's growth plans towards achieving this goal.

Khaled Abdulla Al Qubaisi, Chief Executive Officer of Real Estate and Infrastructure Investments at Mubadala, said, “Digital infrastructure is driving growth and development across all sectors of society, enabling people and economies to reach their full potential. As a responsible global investor, Mubadala sees huge opportunity in supporting Brightspeed’s growth strategy in transitioning large swathes of the U.S. to fiber connectivity and promoting digital equity and inclusion. We’re delighted to be partnering with Apollo and Brightspeed to capitalize on the growth opportunities in fiber deployment and create not only sustainable, long-term value, but also support the digital infrastructure development across the U.S.”

Bob Mudge, Chief Executive Officer for Brightspeed, stated, “We are in the early stages of our company’s growth trajectory, and we are grateful for Mubadala’s endorsement of Brightspeed’s vision and strategy. The added investment from another well-respected institutional investor is a testament to the value we will create and the connections we will enable for homes and businesses across our 20-state footprint.”

Aaron Sobel, Apollo Private Equity Partner, added, “We are pleased to welcome our longtime partners at Mubadala as Brightspeed shareholders and believe this commitment validates our transformational thesis and the strength of the management team.”

This transaction also represents Mubadala and Apollo’s growing relationship since the expansion of their global strategic partnership in 2022. Last February, the firms announced an agreement focused on private credit investment opportunities and deal origination across asset classes.

The Brightspeed investment is part of Mubadala’s rapidly growing digital infrastructure portfolio headed by its Executive Director Mounir Barakat. In 2022, Mubadala invested US$350 million into Princeton Digital Group, a leading pan-Asia data center company focused on expanding world-class data center services to meet increasing demand across Asia. Mubadala has also invested £800 million into CityFibre, the UK’s largest independent full-fiber platform. To date, CityFibre has enabled connectivity for more than 2 million homes in the UK to its advanced fiber network.

The transaction is subject to customary regulatory approvals and conditions. Paul, Weiss, Rifkind, Wharton & Garrison LLP is serving as legal counsel to Brightspeed. King & Spalding LLP is serving as legal counsel to Mubadala.