Acquisition provides Zayo with lowest latency route between New York
and Chicago
BOULDER, Colo. –
Zayo Group Holdings, Inc. (“Zayo”) (NYSE: ZAYO) today announced it has
entered into a definitive agreement to acquire Spread Networks for $127
million in cash. Spread Networks is a privately-owned telecommunications
provider that owns and operates a 825-mile, high-fiber count long haul
route connecting New York and Chicago.
The acquisition will provide Zayo’s customers with the lowest latency
and most direct fiber route between the two cities and additional
physical path diversity. This path is particularly important to
financial services customers who have trading operations in the key
financial markets of New York and Chicago. When combined with Zayo’s
fiber routes from Seattle to Chicago and San Francisco to Chicago, many
other verticals including content, media and cloud providers benefit
from the low-latency, coast-to-coast network. Traffic to and from Asia,
which connects through cable landing stations in the Pacific Northwest,
are also express connected via the combination of Zayo existing fiber
routes and the Spread route.
The high-fiber count route, which currently serves more than 60
customers, has ample capacity for new customers. Of the 432 fibers
available on the route, less than 25 percent are utilized today and the
acquisition provides Zayo with overpull rights and additional conduit.
The route connects 755 Secaucus Rd. in Secaucus, NJ and 1400 Federal
Blvd. in Carteret, NJ to 350 Cermak Rd. in Chicago, IL, with additional
connectivity enabled by Zayo’s existing network. Zayo will use the
acquired assets to provide a low-latency wavelength route from Seattle
to New York.
“Spread constructed this route to provide the fastest possible speed on
the shortest possible route,” said Jack Waters, CTO and president of
Fiber Solutions at Zayo. “This asset is an outstanding complement to our
existing network, providing customers with low-latency options to and
from the country’s leading centers of finance and commerce. Given the
relative simplicity of the business, this will be a straightforward
integration with meaningful, near-term synergies.”
The all-cash transaction is expected to be funded with cash on hand and
debt and is expected to close in the first calendar quarter of 2018,
subject to customary closing conditions. For the quarter ending December
31, 2017, Spread Networks is expected to generate $22.8 million in
annualized revenue and $7.5 million in annualized EBITDA. Zayo expects
to reach $10.5 million in annualized EBITDA from the Spread acquisition
by the September 30, 2018 quarter through cost synergies and organic
growth.
For more information about Zayo, please visit www.zayo.com.
About Zayo Group
Zayo Group Holdings, Inc. (NYSE: ZAYO) provides communications
infrastructure services, including fiber and bandwidth connectivity,
colocation and cloud infrastructure, to the world’s leading businesses.
Customers include wireless and wireline carriers, media and content
companies and finance, healthcare and other large enterprises. Zayo’s
126,000-mile network in North America and Europe includes extensive
metro connectivity to thousands of buildings and data centers. In
addition to high-capacity dark fiber, wavelength, Ethernet and other
connectivity solutions, Zayo offers colocation and cloud infrastructure
in its carrier-neutral data centers. Zayo provides clients with
flexible, customized solutions and self-service through Tranzact, an
innovative online platform for managing and purchasing bandwidth and
services. For more information, visit zayo.com.
Forward-Looking Statements
This press release contains a number of forward-looking statements.
Words, and variations of words such as “believe,” “expect,” “plan,”
“continue,” “will,” “should,” and similar expressions are intended to
identify our forward-looking statements. No assurance can be given that
future results expressed or implied by the forward-looking statements
will be achieved and actual results may differ materially from those
contemplated by the forward-looking statements. These forward-looking
statements involve risks and uncertainties, many of which are beyond our
control. For additional information on these and other factors that
could affect our forward-looking statements, see our risk factors, as
they may be amended from time to time, set forth in our filings with the
SEC, including our 10-K dated August 22, 2017. We disclaim and do not
undertake any obligation to update or revise any forward-looking
statement in this press release, except as required by applicable law or
regulation.
View source version on businesswire.com: http://www.businesswire.com/news/home/20171127005288/en/
Zayo Group Holdings, Inc.
Media:
Shannon Paulk,
Corporate Communications
303-577-5897
press@www.zayo.com
or
Investors:
Brad
Korch, Investor Relations
720-306-7556
IR@www.zayo.com