Fiber services provider Zayo Group has closed its purchase of New York-based American Fiber Systems (AFS).
Financial details of the deal, announced June 30, remain obscure; the Rochester Business Journal had pinned the value between $180 million and $195 million but Zayo has called the numbers overstated,” without providing alternate figures. Zayo CFO Ken desGarennes did say on Oct. 1 that the AFS acquisition will quickly add” $15 million to Zayos earnings before interest, taxes, depreciation and amortization.
In terms of operations, the AFS takeover adds about 1,000 route miles to Zayos metro fiber footprint, and more than 600 buildings. Six of AFS nine markets are new for Zayo. Those markets are Boise, Idaho; Kansas City; Las Vegas; Nashville, Tenn.; Reno, Nevada; and Salt Lake City. All told, Zayo now boasts more than 22,000 fiber route miles with presence in 150 markets.
Zayo has been among the most active companies pushing consolidation among fiber operators as applications including wireless backhaul, consumer video, mobile Internet and data access, enterprise data storage and disaster recovery needs, all drive unprecedented fiber demand. The communications industry has known for some time that fiber is the transport method of the future, but the recent economic collapse halted most companies ability to fund major strategies. As the recession has eased, major players have predicted an uptick in fiber M&A. And those predictions have come to fruition as evidenced by deals including Zayo-AFS, Lightower-Lexent and PAETEC-Cavalier (for the Intellifiber Networks division), to name a few.
Colorado-headquartered Zayo didnt say what positions, if any, AFS executives will hold.