Zayo Group (ZAYO) to Acquire Electric Lightwave in $1.42B Cash Deal
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Zayo Group Holdings, Inc. (NYSE: ZAYO) announced it has entered into an agreement to acquire Electric Lightwave, formerly known as Integra Telecom, for $1.42 billion in cash. Electric Lightwave, which provides infrastructure and telecom services primarily in the Western United States, has 8,100 route miles of long haul fiber and 4,000 miles of dense metro fiber in Portland, Seattle, Sacramento, San Francisco, San Jose, Salt Lake City, Spokane and Boise, with on-net connectivity to more than 3,100 enterprise buildings and 100 data centers.
“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.”
Approximately 40 percent of Electric Lightwave’s existing revenue aligns with Zayo’s infrastructure-focused business segments and will be rapidly integrated into the core Zayo organization, processes and systems. The remainder, which is a valuable and viable cash-flow generating business, has a customer base that aligns well with Zayo’s Canadian SME and voice businesses. “Zayo has a proven track record of integrating key fiber infrastructure assets while also maximizing the value of more traditional telecom business units,” added Caruso.
Zayo expects to achieve significant revenue and cost synergies over the coming quarters, driven by the efficiencies of scale and achieved via Zayo’s proven, streamlined integration process. Zayo’s Tranzact platform and Salesforce.com implementation will provide seamless online access to viewing, purchasing and managing the combined customers and network.
Under the terms of the agreement, Zayo will acquire Electric Lightwave for a total cash consideration of $1.42 billion, representing a pre-synergized multiple of less than eight times LQA EBITDA of $180 million. In addition, Zayo anticipates more than $40 million in annual cost synergies to be realized throughout the integration process and will benefit from more than $400 million in net operating loss carryforwards acquired in the transaction. Zayo expects to close in the first calendar year quarter of 2017, subject to customary regulatory approvals and closing conditions. The transaction will be funded with a combination of cash on hand and debt.
Zayo will host a conference call today, November 30, at 8:00 a.m. EST to discuss this transaction. The conference call can be accessed by dialing 800-909-4761 using conference ID: 21836860. A live webcast of the conference call and associated presentation materials will be available on the investor relations section of Zayo’s website at http://investors.zayo.com.
Gibson Dunn & Crutcher LLP served as legal advisor to Zayo on the transaction. Latham & Watkins and Gray Plant Mooty served as legal advisors to Electric Lightwave.
For more information, please visit zayo.com.
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