Zayo to expand Western U.S. fiber footprint via Electric Lightwave buy

Dec. 1, 2016
Zayo Group Holdings, Inc. (NYSE: ZAYO) has announced its latest acquisition target, Western U.S. fiber-optic network services provider Electric Lightwave. Zayo will pay $1.42 billion in cash for the company, which will add 8,100 route miles of long haul fiber and 4,000 miles of dense metro fiber to Zayo’s footprint.

Zayo Group Holdings, Inc. (NYSE: ZAYO) has announced its latest acquisition target, Western U.S. fiber-optic network services provider Electric Lightwave. Zayo will pay $1.42 billion in cash for the company, which will add 8,100 route miles of long-haul fiber and 4,000 miles of dense metro fiber to Zayo's footprint.

Electric Lightwave recently spun out of Integra Telecom Holdings, Inc. (see "Integra spins out Electric Lightwave"). It operates in such markets as Portland, Seattle, Sacramento, San Francisco, San Jose, Salt Lake City, Spokane, and Boise. It offers on-net connectivity to more than 3,100 enterprise buildings and 100 data centers.

Zayo believes that about 40% of Electric Lightwave's existing revenue aligns with the acquirer's infrastructure-focused business segments. Zayo says the rest will complement the company's Canadian small-to-medium enterprise and voice businesses.

"Electric Lightwave provides us another unique and dense regional fiber network that advances our position as the only national independent infrastructure provider remaining in the U.S.," said Dan Caruso, chairman and CEO, Zayo. "Electric Lightwave has both strong metro fiber assets in key West Coast markets and capacity and routes that will augment Zayo's intercity footprint."

Zayo says the purchase price, which will come from a combination of cash on hand and debt, represents a "pre-synergized" multiple of less than 8X LQA EBITDA of $180 million. The company expects to achieve more than $40 million in annual cost synergies; it also will acquire more than $400 million in net operating loss carryforwards. Zayo expects to close the deal in the first calendar quarter of 2017, subject to customary regulatory approvals and closing conditions.

Zayo has made significant use of mergers and acquisitions as an expansion tool, with buys of Viatel, Latisys, and Allstream recent examples.

For related articles, visit the Business Topic Center.

For more information on high-speed transmission systems and suppliers, visit the Lightwave Buyer's Guide.

Sponsored Recommendations

On Topic: Tech Forecast for 2025/ What Will Be Hot

Dec. 9, 2024
As we wind down 2024, Lightwave’s latest on-topic eBook will examine the hot topics for 2025. AI is at the top of the minds of optical industry players supporting...

From Concept to Connection: Key Considerations for Rural Fiber Projects

Dec. 3, 2024
Building a fiber-to-the-home network in rural areas requires strategic planning, balancing cost efficiency with scalability, while considering factors like customer density, distance...

Getting ready for 800G-1.6T DWDM optical transport

Dec. 16, 2024
Join as Koby Reshef, CEO of Packetlight Networks addresses challenges with three key technological advancements set to shape the industry in 2025.

Linear Pluggable Optics – The low-power optical interconnects for AI and Hyperscaled data centers.

Dec. 23, 2024
This LightWave webinar discussion will review the important technical differentiators found in this emerging interconnect field and how the electro/optic interoperability and ...