Abu Dhabi's Mubadala invests $500M in Brightspeed's fiber broadband ambitions

U.S.-based broadband and telecommunications services company Brightspeed and Mubadala Investment Company, the Abu Dhabi sovereign investor, today announced that Mubadala will invest US $500 million in Brightspeed. With this investment, Mubadala will become a minority shareholder in Brightspeed, alongside investment funds managed by affiliates of Apollo Global Management, Inc. (NYSE: APO).

Bob Mudge, chief executive officer for Brightspeed, commented:

“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.”

According to a press release, headquartered in Charlotte, North Carolina, Brightspeed is the fifth-largest incumbent local exchange carrier (ILEC) in the U.S., with the capability of serving more than 6.5 million homes and businesses in mainly rural and suburban communities across the U.S. Midwest and Southeast, and parts of Pennsylvania and New Jersey. Brightspeed officially launched operations in October 2022 and began the build-out of its state-of-the-art fiber-optic network, which started serving its first fiber customers in March 2023.

As data volumes increase and demand for faster, reliable connectivity rapidly grows as a result of the rise of cloud services, video streaming, IoT applications and 5G technologies, Brightspeed said the company expects to play a crucial role in providing essential digital infrastructure solutions, and is rooted in an ambition to help bridge the digital divide.

The company says its planned fiber optics transformation is expected to reach up to 3 million homes and businesses over the next five years, including in many places where fiber and advanced technology have not historically been deployed. The company said the new investment will help accelerate Brightspeed’s growth plans to bring high-speed, dependable internet connectivity to communities where access to fiber internet has been limited in the past.

Khaled Abdulla Al Qubaisi, CEO of real estate and infrastructure investments at Mubadala, remarked:

“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.”

The 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.

Aaron Sobel, Apollo Private Equity Partner, said, 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.”

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 through its advanced fiber network.

The new 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.

In 2021, Apollo Private Equity Funds agreed to acquire Lumen Technologies’ ILEC assets and associated operations to create the Brightspeed Internet organization. The following video from Apollo describes Brightspeed’s strategy to help bridge the digital divide.