Fiber M&A: Gateway, WANRack to Merge

There has been some consolidation activity in the fiber last mile this week. Gateway Fiber and WANRack have announced plans to merge into a national FTTX platform touching 25 states.

Gateway Fiber is based out of St. Louis, where it began its FTTP buildout in 2019. From there they expanded into the Minneapolis suburbs before finding similar opportunities to expand into communities in western Massachusetts.

WANRack was founded in 2013 out of the Kansas City area with the aim of leveraging E-Rate opportunities to enter both residential and commercial markets in 23 states. WANRack bought KwiKom Communications two years ago, giving them a regional footprint in Kansas, Missouri, Oklahoma, and Nebraska.

Combined the companies will have greater scale, combine WANRack’s E-Rate approach to new markets and expertise with the education and SMB space with Gateway’s more direct FTTP expansion plans. Gateway’s Chris Surdo will lead the combined organization, with a unified management team sourced from both sides.

Both companies are currently backed by funds owned by CBRE Investment Management, which acquired a majority stake first in WANRack in 2021 and then Gateway in 2023. If all goes well, this new deal should be closed in the first half of 2025.

It certainly looks as if CBRE has put together a consolidation platform for last mile fiber in the residential, education, and SMB space. I’d expect them to be looking at other assets once this integration process settles down.

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Categories: FTTH · Mergers and Acquisitions · Metro fiber