About $65 billion of the proposed $1 trillion infrastructure bill calls for broadband infrastructure investment. And to no surprise, private equity is looking to take advantage. Apollo Global Management Inc. is investing $200 million in FirstDigital Telecom, a fiber-based carrier in the Western U.S. Once the bill likely passes, expect PE deals in the sector to ramp up.

“This transaction is representative of our larger infrastructure strategy focused on middle market companies and helping them to scale with a strategic partner like Apollo, and we’re also highly focused on opportunities that help bridge the digital divide in America,” Apollo senior partner Dylan Foo tells Mergers & Acquisitions. “With respect to the infrastructure bill, this investment was by no means predicated on that package, but many areas of emphasis such as power, water, transportation and digital infrastructure align with our expertise and emphasis at Apollo. We’re encouraged by the bipartisan support it received so far.”

Infrastructure isn’t just roads and bridges anymore. Even a slimmed down version of a federal infrastructure bill would incentivize private investment in companies. The FirstDigital investment, which was announced on July 29, builds upon the firm’s 30-year track record in which Apollo funds have invested more than $20 billion in infrastructure-related opportunities. Apollo is currently investing out of its second dedicated infrastructure fund, which focuses on communications, power and renewables, transportation and midstream energy.

A bipartisan group of senators has finalized the text of a roughly $1 trillion infrastructure bill. The more than 2,000-page legislation includes federal funding for roads, bridges, passenger and freight rail, broadband, the electric grid, among other projects. The Senate could still make amendments to the bill before voting, but Majority Leader Chuck Schumer expects the legislation to pass the chamber in a matter of days. It would then need approval from the House where it could face more pushback before making its way to President Biden’s desk. 

I’m interested to see how much M&A in this space will pick up once the bill goes through.

– Demitri Diakantonis