**Editor’s Note: Please click here for a recap of the biggest channel-impacting mergers in September-October 2016.**
What a rollercoaster year it’s been for Electric Lightwave, which recently announced a split from Integra, now to be gobbled up by Zayo in a $1.42 billion deal that will greatly strengthen Zayo’s fiber stake along the West Coast.
Vancouver, Washington-based Electric Lightwave is the largest regional, fiber-based provider in the western United States, serving more than 5,400 large enterprise customers, wholesale carriers, web content providers, government organizations and educational institutions. It has 8,100 route miles of long haul fiber and 4,000 miles of dense metro fiber in Portland, Seattle and Spokane, Washington; Sacramento; San Francisco; San Jose; Salt Lake City; and Boise, Idaho — with on-net connectivity to more than 3,100 enterprise buildings and 100 data centers.
Boulder, Colorado-based Zayo provides fiber, bandwidth and telecom infrastructure to enterprises. The deal is expected to close in the first quarter of 2017. It will be funded with a combination of cash on hand and debt.
“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, Zayo’s chairman and CEO. “Electric Lightwave has both strong metro fiber assets in key West Coast markets, and capacity and routes that will augment Zayo’s intercity footprint.”
About 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,” Zayo said. The remainder has a customer base that aligns well with Zayo’s Canadian SME and voice businesses, it said.
Richard Murray, president of CarrierSales, Electric Lightwave’s largest master agent, told us he’s excited about this merger.
“With all of the mergers going on in our industry, this was one that we saw on the horizon given all of the changes they have made within the last year. This also gives Electric Lightwave agents access to fiber that didn’t have it previously. Strong Integra markets like Denver and Minnesota now have fiber.”
Zayo expects to achieve significant revenue and cost benefits over the coming quarters, via the company’s 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, the company said.
Zayo anticipates more than $40 million in annual cost benefits throughout the integration process.
Historically, Integra focused on a CLEC business model, and from 2011 to 2016 has been transitioning to a fiber-focused business model.