Last week we had our two annual January M&A polls looking at the most likely acquirers and acquirees of 2018. I can’t say I disagree much with with the emerging results.
Readers think that the big buyers this year will be Crown Castle and Zayo, followed by GTT, Uniti Fiber, and Windstream. Zayo has been near the top of every such list I have done since the beginning, and they have not yet failed to live up to the task. Crown Castle, GTT, and Uniti Fiber have certainly been holding up their end of the bargain as well, as has Windstream. And there doesn’t seem to be any reason to think they won’t continue down the same path – in fact Windstream already did a small deal over the holidays in fact, acquiring MassComm.
The next tier of buyers includes CenturyLink, though they’ll be doing some heavy integration work I think, the cable operators Comcast and Altice, and the content/cloud players Google and Amazon. All five might certainly have the means if the right opportunity arises, although it seems to me that all fie of this tier would likely be looking at the same targets.
As for the likely targets of consolidation, FiberLight and FirstLight Fiber head the list. FiberLight is one of the last remaining supra-regional independent fiber builder/operators that has somehow remained aloof from the M&A activity that has swept up so many over the years, and a perennial favorite to finally get bought. Meanwhile, FirstLight Fiber has been one of the most active acquirers itself over the last five years, but has basically finished consolidating upper New England and upstate New York to the extent that I agree it very well might become a target itself. However, I think they still might be a consolidator yet and deserve to be higher on the first list as well.
The next two on the list are, interestingly, Zayo and Cogent, and these are more likely to draw the attention of the four cables and content players plus CenturyLink that I mentioned earlier. I speculated about Cogent becoming a target last year, and though it didn’t happen I think the reasons it might are still there. Meanwhile, speculation that Zayo will eventually become a target of the likes of big cable (especially Comcast) or big content has steadily risen over the last few years and isn’t going away any time soon.
The next few on the list include Everstream and Cross River, both representing interesting regional depth that someone might want, Windstream, for which I have more trouble coming up with a buyer, and WOW! which is probably something Altice might take a swing at.
How much of this is likely to actually happen is another matter. But there’s certainly a rhyme or reason to most of it.
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