The Wall Street Journal reported yesterday that both Sidera and FiberLight are for sale. Of course Ramblings' readers knew about Sidera already, as I broke that news last week. As for FiberLight, they are owned by the Thermo group and have been since 2003. I'm certain that they'd sell if they got the price they want, however Thermo has made sure FiberLight has the funding to expand and I suspect their price won't be cheap. But those aren't the only rumors I'm hearing right now. Actually, it's quite chaotic on the rumor front, much like it was last year around this time - there are lots of assets in play. Here are a few rumored deals that seem to be popping up the most:
TW Telecom to buy Zayo - I've heard this from several sources now, with no confirmation. There are pros and cons to such a deal. The footprints are complementary and Zayo's private equity owners could very easily see this as a good exit path. However, the price would surely be high, higher than TWTC's multiple in the public markets. Also, Zayo is principally wholesale with lots of fiber and transport while TWTC is principally focused on the enterprise with IP/Data. They could add 1+1 and get 3, but they'd have to really want to - and I'm not sure TWTC is ready to expand that focus.
Zayo to buy Sidera - Obviously this can't be true if the preceding rumor is. But if Zayo's backers aren't selling then they're probably buying and Sidera may be the most likely target. It could even be a stock deal, whereby ABRY keeps its foothold in the metro fiber space while gaining nearly national scale. In fact, the idea of some of the private equity guys who powered the buying last year joining forces on reasonable terms is pretty attractive. All sorts of combinations make sense then - Zayo+360Networks+Sidera, FiberLight+Lightower+DukeNet, Sidera+Fibertech+24/7Fiber etc. Not that those are actual, live rumors -- I'm just rambling.
XO is now soliciting bids - Again, several have told me this but nothing definitive yet. The two bidders that come up the most are PAETEC and LVLT, although if those two are there then surely TWTC, Zayo, Earthlink, and a few others can't be far away. However, I suspect that even if this rumor is true, what we're seeing is the special committee seeking comps in its valuation of that offer by Icahn which remains outstanding and unresolved. Icahn has yet to indicate he is ready to actually sell, though if that did happen I think things would move very quickly. Perhaps XO will tell us a bit more when they report earnings, which will likely be at the last possible minute - which I think is on Monday (5/16).
Any other rumors making the rounds out there? Leave a comment!
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