Surf Internet gets $100M from DigitalBridge for fiber buildout

ELKHART, Ind. – Surf Internet, a leading fiber-optic high-speed internet service provider in the Great Lakes region, today announced that it has raised $100 million of debt financing from DigitalBridge Credit, a division of DigitalBridge Group, Inc. (NYSE: DBRG). Surf Internet secured the new debt capital to support the Company's mission to transform broadband in the Great Lakes region by expanding its dense fiber networks into more communities. The debt raise comes alongside significant equity investment from the Company's existing sponsors Bain Capital and Post Road Group, and management team.

Surf Internet provides predominantly fiber-based, high-speed broadband to residential subscribers, businesses, educational institutions, and municipalities across Indiana, Illinois, and Michigan. The Company was acquired by Bain Capital and Post Road Group in 2021 to capitalize on attractive growth opportunities in the region while strengthening its commitments to bridging the digital divide across the Midwest. Over the last two years, Surf has successfully bolstered its executive leadership team, completed an extensive rebranding, and secured grants with local municipalities to expand broadband access in the Great Lakes region. Surf now serves over 27,000 customers across 45 markets in Indiana, Illinois, and Michigan. The Company offers residential speeds up to 10 gigs and has increased its fiber subscriber base sevenfold since the acquisition.

"We are thrilled to enter the next phase of expansion with highly experienced digital infrastructure investment partners who share our vision for building Surf into a leading fiber-to-the-premise (FTTP) provider," said Gene Crusie, CEO of Surf Internet. "The addition of DigitalBridge Credit to our capital structure follows the tremendous support over the past several years from our equity partners, Bain Capital and Post Road Group, who remain committed to our growth strategy," added Ryan Delack, CFO of Surf Internet.

The new funding will support Surf's plan to expand its network into over 60 markets while strengthening its multigig capabilities. Surf is on pace to surpass 100,000 fiber passings in 2023 and has a pipeline of attractive build opportunities to roughly double its fiber passings through 2024.

"We are excited to partner with Surf Internet, Bain Capital, and Post Road Group in support of the next phase of fiber-to-the-premise buildouts in underserved U.S. markets," said Chris Moon, Managing Director at DigitalBridge Credit. "DigitalBridge believes that access to high-speed internet service is essential and, together with our partners, we are dedicated to supporting Surf's continued expansion."

"As we approach the 100,000 fiber passings milestone, partnering with DigitalBridge Credit will enable Surf to further accelerate its fiber network expansion. It's clear that the Surf Internet FTTP solution is resonating deeply with consumers and businesses across the Midwest, and we see significant opportunities for continued, attractive edge-outs in 2023 and beyond," added David Haswell, a Vice President at Bain Capital.

"This transaction with DigitalBridge Credit continues our multi-year partnership with Surf's outstanding management team and will catalyze the Company's next phase of growth, as it expands its fiber network to additional underserved communities across the Midwest," said Andrew Runk, Managing Director at Post Road Group.

The transaction closed on February 3rd, 2023. Houlihan Lokey served as exclusive financial advisor and placement agent to Surf Internet and Kirkland & Ellis LLP served as legal counsel. White & Case served as legal counsel to DigitalBridge Credit.

Read the press release here.

Surf Internet