Advances made in Web-scale networking in recent years have been substantial, particularly given the rapid increases in bandwidth demand seen in that time frame. Recently, Uniti Group, a real estate investment trust (REIT), has been making substantial advancements in the inorganic fiber and Web-scale networking market. Recently, it made one more such move, setting up a definitive agreement to buy Southern Light (News - Alert).
Southern Light runs a complete fiber network throughout several of the Gulf states, including Alabama, Georgia, Louisiana, Mississippi, and portions of Florida. That's a total range of about 6,100 miles providing service to nearly 5,000 buildings in the region, covering a combined total of 12 markets.
Uniti Group's move to purchase Southern Light, meanwhile, came as something of a shock to the field, as Southern Light had been closely held by investors, and was likely to remain so. Though given the terms of the deal thus far announced—$700 million in cash and stock—it's likely that Uniti simply offered Southern Light a deal that was too good to pass up.
This deal is expected to account for 30 percent of Uniti's revenue, along with a set of other deals that recently emerged. Uniti's presence in fiber is only on the rise, as it originally started life as a spinoff of Winstream's fiber assets.
Such a means proves that Uniti Group is devoted to continuing to build not only its presence in fiber, but also in Web-scale networking. In so doing, it's likely poised to take advantage of growing demand in this market, which has been on the rise for years. Ever since Google (News - Alert) Fiber stepped in and showed the rest of the market what kind of damage could be done to a bottom line when years of refusal to upgrade met wildly increasing demand for services, companies have been on a tear to improve services. Uniti is likely eager to cash in on that growing demand—which likely won't slow down, ever—and made the purchase accordingly.
More bandwidth demand means more use for Web-scale networking, and more value for companies like Southern Light, likely targeted for purchase by companies just like Uniti. I'd expect more of these kinds of sales to crop up as the months go on.
Edited by Alicia Young