Zayo Doubles Fiber Assets
Zayo Group Inc. (NYSE: ZAYO) said more acquisitions were to come and it has so far kept its promise in a big way. The startup just announced the acquisition of Citynet Fiber Network (CFN), for an undisclosed sum.
CFN's network has 8,500 route miles of fiber in 10 states. The acquisition now doubles Zayo's network to over 17,000 route miles including 1,400 on-net buildings in 12 states.
CFN is the wholesale division of Citynet -- a regional provider of telecommunications services. It is unloading its fiber assets to focus more on what it feels is its core strength -- retail telecom services. Jim Martin, CEO of Citynet also notes in a statement that the transaction will allow Citynet to be "virtually debt free." [Ed. note: Free from virtual debt?]
Meanwhile, for Zayo, this is its sixth fiber acquisition since the spring of 2007. The company has built its strategy on acquiring left fiber assets in Tier 2 and Tier 3 markets where many incumbent carriers' networks do not currently reach. (See Level 3 Co-Founder Starts Zayo Bandwidth and Startup Spotlight: Zayo Bandwidth Inc.)
While the price tag of the CFN acquisition is unclear, Zayo had secured $85 million in debt financing back in November for these very purposes. "The purpose of the debt raise was primarily future acquisition opportunities," said Zayo COO John Scarano at the time of the financing. (See Zayo Buys, Grows & Raises Debt.)
Zayo Bandwidth's network now spreads through 100 metropolitan areas across the eastern and central U.S. The company has grown quickly. At the time of its formation, it only had 4,600 route miles of fiber touching 200 on-net buildings.
— Raymond McConville, Reporter, Light Reading