In an M&A move that substantially expands the breadth of the company's Southeastern footprint, Zayo finally cleaned up its relationship with US Carrier by agreeing to purchase the 50% they didn't already own. The deal adds some 3,700 miles of regional fiber primarily in Georgia with connectivity into Tennessee, Florida, and Alabama.
Zayo had acquired an interest in the Georgia-based regional network as part of its purchase of American Fiber Systems in 2010. But at that time, the USCarrier board said that the deal amounted to an unauthorized transfer of ownership that resulted in a loss of AFS's voting rights, while still recognizing Zayo's economic interest. The dispute has simmered for almost two years, but it was rather obvious how it would be resolved in the end given Zayo's ongoing desire for more and more fiber. Indeed, Zayo is buying the remainder of USCarrier for $13.5M.
The deal gives Zayo regional coverage to go with its very deep Atlanta metro network, with fiber into some 40 minor cities plus connectivity to its nodes in Nashville and Birmingham plus a new presence in Savannah, Jacksonville, Tallahassee, and Montgomery.
US Carrier was originally built by a coalition of independent telephone companies looking for an alternative to Bell South for their connectivity needs. AFS invested in the company back in 2006 during the fiber M&A flurry of that time.
Zayo's purchase of US Carrier is expected to close in Q4. Meanwhile it still has the purchase of FiberGate to finish up as well. Along with AboveNet, Arialink, and MarquisNET it's been a very busy year for Zayo.