Seven times lucky, or so Zayo Group (news, filings) hopes as they have now announced their seventh acquisition of the year. They are buying Baltimore’s Litecast for $22M in what is probably their final deal of the year, although there’s still two weeks left and you just never know.
Litecast owns and operates a dense metro fiber network in the Baltimore metro area, connecting up 110 on-net buildings including the major data centers with about 50 route miles of fiber. It’s a highly concentrated asset that meshes very well with the FiberGate and AboveNet footprints they bought over the summer, fleshing out the company’s presence in Maryland between the two major markets of Philadephia and Washington DC/Northern Virginia in which they are already huge.
It’s been quite a busy year for Zayo, with the MarquisNet, AboveNet, Arialink, FiberGate, US Carrier, First Communications, and now Litecast deals following one after another. One keeps waiting for them to take a break, but Dan Caruso and crew clearly feel that it’s time to strike while the iron is hot. There will never be such a collection of metro fiber assets to roll up again, and at the moment they’re almost alone in the game.
There are a lot fewer targets now than there used to be, but there are still dozens of potential targets if Zayo stays on the warpath in 2013. Florida still looks like a place they’d like to do a deal if they can find something. There’s FiberLight of course, but maybe FPL will finally be ready to part with its Fibernet division, given that they haven’t followed up the acquisition of the Grande metro assets in Texas with further rollups.
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When will they buy EU Networks?
Whne does XO come into the MNA fold. Perhaps Pre or in conjunction with a ZAYO IPO to fund the acquisition
That’s not up to Zayo, it’s up to Icahn.
I don’t know if Zayo takes a run at euNetworks… We all know that Mr. Caruso is on the board of the company and all, but until the Abovenet purchase, they had made no strides into any extra-US markets, save for 360Network’s one cable in Vancouver. And since Vancouver and ABV’s European and Toronto networks fell into their lap as part of much larger purchases for American assets, we have not seen any press releases citing project aimed at taking greater advantage or increasing depth or reach into these foreign locations. My guess is that it’s just an easier headache to operate a large telco company in the states where legal regimes are clearly understood then it is to venture out into new countries where your current legal team may not be as well versed and expect the quick, easy, and profitable integrations that Zayo has expected and produced in the past.
yes Icahn controls XO but Zayo leadership controls whether they want to structure a deal with Icahn and how it would look. Seems Zayo can put together a compelling deal if the chose to partner. Maybe a better question is whether or not XO is relevant any longer and there assets/revenue of significant interest to the consolidator crowd. Level3/Zayo/Cable/centurylink etc
They tried back in 09 and were rebuffed. But XO has so much revenue that doesn’t fit with Zayo’s business model, I doubt they will ever be able to match Icahn’s price. And with AboveNet, they probably don’t have to.
On the other hand, Level 3’s case for buying XO has increased over the past year as they’ve moved further toward a wider range of enterprise sales. If CenturyLink were to buy tw, it would clear things up further and a Level3/XO deal might be a quick followup.
What non-incumbent, alternative fiber assets remain in Baltimore?
24/7 Mid-Atlantic, mentioned elsewhere here in the 2012 M&A review, is owned by a Baltimore investor.
FiberLight announced a new 104 mile network in 2010 “to augment an existing 123 mile Baltimore network.”
AiNET, focused on DC, has announced that a “network in the Baltimore region, including Baltimore city center, Reisterstown and Towson, Glen Burnie and Ft Meade is significantly underway.”
If I remember right, LiteCast’s downtown network runs through the city-owned conduit network, either next to or including (by IRU or other arrangement) other providers’ fiber.
Another legacy source of alternative fiber in the region was Verizon’s settlement with the FCC when it acquired MCI (former WorldCom/UUNET) in 2005. Verizon was required to sell IRUs for 10 years or more in locations where their fiber network and MCI’s overlapped. The resulting deals were confidential but in this region seemed to result in small (non-)competitors announcing new fiber networks in 2006 and 2007. Probably most of these IRUs expire by 2017.
any thoughts on the multiple paid question above?
AboveNet had a pretty good network in Baltimore.
I am sure Dan has talked with Fiberlight and as far as Florida goes, I am sure he has talked with Frank at US Metro. Fiberlight would be an attractive piece to their network map coverage.
Dan has talked to everyone…
still like to know a guess on multiple
When I have one, I’ll be sure to share it.
Does anyone know what is going on at lvlt. Is collaboration team surviving.
No chance. Kalyn is deep six due to large collab customer loss. She’s screwed.
don’t know if what you’re saying is true of false, but the collab rev model was horridly flawed. So much of the collab rev came from antiquated (and overpriced) dial-up voice services.
If ever a group suffered from the Innovator’s Dilemma it was collab. While other carriers were exploiting new technologies to win and retain customers, the Global Crossing leadership team, and Kalyn, ignored inevitable changes (which they were well aware of) and, instead, hung on to their over-priced dial-up voice revenue model. The arrogant LVLT empty suits were too clueless to recognize a large percentage of the collab revenue was in jeopardy and could be written down (or lost) within 18 months.
I am not sure if what you are saying has any validity to it … but Kalyn knew what she was doing when she positioned herself for the plan she advocated strongly for. She was putting herself into the cross-hairs of a potential plan miss if things went awry but she did it anyways. She’s not too smart … looks like most of her commission has gone to plastic surgery and not to education and leadership programs. Still lvlt management might keep her around b/c she’s decent eye candy.