United Fiber & Data, a York-based fiber optics firm that once promised to bring jobs and data centers to eastern Pennsylvania, is selling “substantially all” of its assets to a New York-based company.
Those assets include the signature project of United Fiber & Data, or UFD, a company founded in 2012 by former members of the rock band Live.
The project is a 323-mile fiber optic line linking New York City to a cluster of data centers in Ashburn, Virginia.
The deal also includes UFD’s 79-mile fiber-optic line connecting more than 350 businesses and data centers in New York City and New Jersey.
The buyer is Lightpath, a fiber optic firm jointly owned by New York-based cable company Altice USA and Morgan Stanley Infrastructure Partners.
A Lightpath spokesperson declined to reveal the terms of the transaction, slated to close in the third quarter.
The sale involves only UFD assets, the spokesperson said. But, she added: “Lightpath and UFD [are] continuing to explore any potential synergies of personnel.”
Why is this happening: In a press release, Lightpath described the acquisition as building on its existing assets in New York City.
The purchase also gives Lightpath a second fiber-optic route to Ashburn, one that wends to the west of its existing line along the Interstate 95 corridor.
UFD often pitched its line as an alternative to the I-95 route, one seen as vulnerable to terror attacks or other disasters.
The background: It’s complicated.
Former Live members Patrick Dahlheimer, Chad Gracey and Chad Taylor and their business partner Bill Hynes launched UFD with plans to employ hundreds of people, generate hundreds of millions in tax revenue and build data centers in Allentown, Lancaster, Reading and York.
The company’s backers included the late Louis Appell Jr., who headed pottery manufacturer Susquehanna Pfaltzgraff and other business interests.
Appell Jr., a major philanthropic force in York County, lent more than $20 million to the company before his death in 2016.
By 2020, UFD was embroiled in litigation between its co-founders and Appell Jr.’s heir, Louis Appell III, who had a 26.18% stake in the company.
Appell III accused the co-founders of siphoning money from the company for their personal pursuits, a claim the co-founders disputed in court. They claimed he was trying to wrest control of the company from them.
The lawsuit was settled on undisclosed terms in August 2022.
UFD’s main business is operating and finding clients for its fiber line between Manhattan and Ashburn, which was completed in 2019. The promised data centers never materialized.
Appell III referred questions about the sale to UFD CEO Chris Lodge. Efforts to reach Lodge and another UFD exec, Andrew Paxton, were not successful.
Taylor, a former CEO of the company, said in a statement: “The vision to build a disruptive data network and engage with meaningful customers has been realized. I’m grateful to have worked alongside a team who pulled together to overcome a multitude of challenges — never giving up or losing hope. I wish them well. What a journey. They say it’s not how you start but how you finish. In this case, mission accomplished.”
Hynes, also a former CEO, declined to comment.
The buyer: Just over half of Lightpath — 50.01% — is owned by Altice USA, itself controlled by French Israeli billionaire Patrick Drahi.
Altice provides broadband, video and telephone services to residential and business customers through a variety of subsidiaries. The company also provides content and advertising services.
Altice had revenue of $9.24 billion in 2023, including $1.47 billion in revenue from business services, the category in which Lightpath falls, according to an earnings release.
Altice did not break out Lightpath’s revenue but said it was up 2.1% in 2023 and 9.2% in the fourth quarter alone.
Morgan Stanley Infrastructure Partners is a specialized private equity arm of New York-based financial giant Morgan Stanley. The unit owns the remaining 49.99% of Lightpath.
Editor’s note: This story has been updated from its original version to include comments from Chad Taylor and Bill Hynes.
