In May, Zayo Group, an IP services provider, offered $11.45 per FiberNet share, or approximately $88 million. The deal seemed assured until, less than a month later, enterprise-focused cable operator RCN stepped in with a $96 million buyout offer.
But in the end, FiberNet shareholders opted for a Zayo parent; they thought the two companies were a better fit, even though the money was less.
The Zayo-FiberNet deal closed Wednesday and was valued at approximately $90.7 million. Privately held Zayo bought all of publicly traded FiberNet’s outstanding shares, which means FiberNet investors will receive $11.45 in cash for each share. FiberNet also no longer trades on the NASDAQ.
Zayo now is the exclusive operator of the 60 Hudson Street interconnect exchange.
“The strategic foundation of Zayo Group is to provide bandwidth infrastructure services to carriers, Internet companies, and other large consumers of bandwidth,” Dan Caruso, CEO of Zayo Group, said in a prepared statement. “FiberNet’s important role in providing connectivity in and between the major carrier hotels is a natural extension of Zayo’s bandwidth services.”
Zayo runs three business units: one focused on bandwidth, another on enterprise networks, and the third on voice services. However, the company is launching a fourth division dedicated to providing colo and interconnection services. Zayo hasn’t named the new unit yet.
Meanwhile, Zayo’s network connects to several of the same buildings where FiberNet operates. The two companies’ networks will interconnect “almost immediately,” Zayo said, and Zayo Bandwidth will absorb FiberNet’s transport network and business.
Zayo plans to expand beyond its East Coast and Chicagoland markets thanks to its new reach via FiberNet.
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October 15 2018 @ 20:26:22 UTC