Cerberus Doubles Down on SubCom with $2.3B Deal for Internet's Backbone

NEW YORK, NY – April 20, 2026 – In a move that underscores the immense strategic value of the world's hidden digital arteries, Cerberus Capital Management has closed a landmark $2.3 billion transaction for SubCom, the sole U.S.-based, vertically integrated provider of the subsea fiber optic cables that carry nearly all global data.

The deal, structured as a single-asset continuation vehicle led by CVC Secondary Partners, allows Cerberus to both extend its ownership of a prized asset and inject new capital to fuel its expansion. Cerberus-managed funds also made an additional investment, solidifying their controlling stake and signaling deep conviction in the future of subsea infrastructure. The transaction is a powerful statement about the critical importance of the physical infrastructure powering the AI revolution and the escalating geopolitical competition to control it.

The Invisible Backbone of the Digital World

While users stream movies, join video calls, or leverage cloud-based AI, their data is physically traveling through bundles of glass fibers thinner than a human hair, laid across thousands of miles of ocean floor. Subsea cables are the unsung heroes of the digital age, underpinning an estimated 99% of all intercontinental data traffic and trillions of dollars in daily financial transactions.

SubCom, which Cerberus carved out of TE Connectivity in 2018, stands in a unique and powerful position. It is the only American company with the end-to-end capability to engineer, manufacture, and install these highly complex systems. Its main global competitors are France's Alcatel Submarine Networks (ASN) and Japan's NEC Corporation, with Chinese firms like HMN Technologies also vying for market share. This makes SubCom not just a corporate asset, but a strategic one for the United States.

The demand for the infrastructure SubCom builds is exploding. The global submarine cable systems market, valued at over $15 billion in 2024, is projected to more than double to over $40 billion by 2034. This surge is driven by insatiable data appetites from cloud computing hyperscalers, the global rollout of 5G and 6G networks, and, most significantly, the dawn of the artificial intelligence era. AI models require colossal datasets for training and real-time processing, creating unprecedented demand for high-capacity, low-latency global connectivity.

"SubCom holds a mission-critical role in the infrastructure that connects the world," said Mike Sanford, Cerberus Global Head of Private Equity, in a statement. "We believe SubCom will remain central to building and sustaining the infrastructure behind an increasingly data-driven world, and this milestone reflects that conviction."

A New Playbook for Private Equity

This $2.3 billion deal is not a typical sale. Instead, Cerberus has employed a single-asset continuation vehicle—a sophisticated tool gaining rapid traction in the private equity world. This structure allows the firm to effectively sell SubCom from one of its older funds to a new, dedicated vehicle, giving existing investors a choice: cash out their profits or roll their stake into the new entity to participate in future growth.

This strategy has become the go-to playbook for private equity firms looking to hold onto their best-performing "trophy assets" for longer than a typical fund lifecycle allows. With public markets volatile and M&A activity muted, continuation vehicles offer a way to generate liquidity for investors while continuing to nurture a high-growth company. In 2024, these vehicles accounted for 13% of all private equity exits, a significant jump from just 5% a few years prior.

By bringing in CVC Secondary Partners as the lead investor, Cerberus validates SubCom's valuation and brings fresh capital to the table. For new investors, it's an opportunity to buy into a de-risked, market-leading asset with a clear growth trajectory.

"SubCom is a high-quality, mission-critical business at the center of global digital infrastructure, and we are pleased to support its continued growth," noted Rikesh Mohandoss, Partner at CVC Secondary Partners. The move signals a shared belief that SubCom's most significant growth is still ahead.

Cables, Competition, and National Security

Beneath the financial engineering lies a stark geopolitical reality: subsea cables are a frontline in the great power competition between the United States and its rivals. These cables are highly vulnerable, concentrated in specific corridors and susceptible to accidental damage from ship anchors or deliberate sabotage. Their security is now a top national security concern for governments worldwide.

The U.S. government has grown increasingly wary of the involvement of Chinese-backed firms in global cable projects, fearing opportunities for espionage and data disruption. This has elevated the strategic importance of SubCom as a trusted, U.S.-based supplier. The investment from Cerberus, particularly through its dedicated Supply Chain strategy aimed at bolstering U.S. resilience, underscores this point.

"As a global industry leader and the only U.S.-headquartered provider of subsea cable systems, SubCom's growth opportunities continue to be robust," added Pat Moriarty, a Cerberus Supply Chain Managing Director. "Our continued partnership through this new investment exemplifies our Supply Chain strategy's focus on advancing the security and resilience of the U.S. and its allies."

This trend of governments safeguarding digital infrastructure is global. France recently moved to take a majority stake in SubCom's competitor, ASN, to ensure its sovereign control. Cerberus's move to double down on SubCom can be seen in a similar light—a private sector action that aligns perfectly with national strategic interests.

With this new infusion of capital, SubCom is poised to accelerate its expansion and technological development. Dave Coughlan, the company's CEO, stated, "With Cerberus' continued partnership, we are strategically investing in our platform to meet that global demand at scale." This investment will enable SubCom to lay the vital connections needed for the next wave of digital innovation, ensuring the unseen backbone of our connected world remains robust, secure, and ready for the future.