Zayo Enters $32M Agreement to Buy Neutral Network
- Feb 07, 2018
Zayo Group Holdings has entered an agreement to purchase all assets of Neutral Path Communications and Near North Partners for $31.5 million, enhancing the company’s Midwest fiber infrastructure. Closing is slated for June 2018, with the price subject to factors such as net working capital and other adjustments, as well as sales performance.
The acquisition will provide Zayo with 452 miles of regular and long haul fiber, extending the company’s North American footprint. The company will also benefit from any existing leased fiber mileage. Neutral Path Communications’ infrastructure comprises more than 2,000 route miles and approximately 150,000 fiber miles, stretching from Minneapolis to Omaha, Neb., Kansas City, Mo., Chicago and Denver.
A year of expansion
Zayo entered the new year with multiple new assets under its control across the U.S. and Canada. Most recently, the company entered an agreement to acquire Optic Zoo, a Vancouver-based fiber provider, for approximately $24.7 million (CAD $31 million). The transaction significantly increased Zayo’s presence in Vancouver and Western Canada. In November last year, Zayo bought Spread Networks, for $127 million, adding a high-density long haul route between New York and Chicago to its portfolio.
In March, the company closed a $1.4 billion deal, the acquisition of Electric Lightwave (formerly known as Integra Telecom), a transaction which yielded 8,100 route miles of long haul fiber and 4,000 miles of dense fiber in several metros: Denver, Minneapolis, Phoenix, Portland, Seattle, Sacramento, San Francisco, San Jose, Salt Lake City, Spokane, Wash., and Boise, Idaho, connecting approximately 3,100 enterprise buildings and 100 data centers.
Zayo Group Holdings now operates 126,065 route miles and 10.7 million fiber miles across 385 markets. The Neutral Path acquisition is expected to add approximately $2.1 million in annualized EBITDA by the end of March, and the company projected annualized cost synergies of approximately $600,000 within four quarters of the closing date.