Zayo Acquires AboveNet and Arialink – What’s Next?
The past year has been huge in terms of acquisitions in the telecom world. In 2011, the buzz was about Zayo’s acquisition of 360 Networks, and it looks like Zayo’s moving on the same path at a steady pace. Zayo has made the official announcement that they are in the midst of acquiring dark fiber giant AboveNet, and the very next day announced that they are also to acquire Arialink, Mid-Michigan’s largest fiber optic service provider.
The AboveNet deal, which is subject to customary approvals, is expected to be finalized for April 17th and close by mid-2012. Zayo has offered $2.2 billion, and AboveNet has a 30 day go-shop window, which is very unusual for an acquisition.
Dan Caruso, President & CEO of Zayo, says of the AboveNet acquisition:
“AboveNet and Zayo’s business models are closely aligned with a disciplined focus on high bandwidth fiber-based communications services for enterprises, government and carrier customers. We have admired AboveNet’s business model and results and believe the combination will create value for customers, employees and investors.”
Of the Arialink acquisition, Glenn Russo, Zayo’s EVP of Corporate Development says:
“Arialink has built a great business by extending their fiber-based Ethernet network to key businesses and government agencies in Michigan. We have worked with Arialink for some time and adding their reach to Zayo’s national network will allow us to offer a broader range of solutions to our collective customers.”
AboveNet will be adding its 2.3 million fiber miles and 2800+ on-net buildings to Zayo’s already large footprint of 45,000 route miles in 42 states, 5200 lit buildings and 94,000 square feet of colo space. Abovenet had honed its processes, its alternative channel programs, its pricing and products to the point that they have become the benchmark of operational excellence. With the Abovenet acquisition, Zayo has gained far more than fiber mileage and lit buildings. They have gained a finely tuned machine, that when combined with Zayo’s other resources, could quickly vault them into being the number #1 alternative access solutions provider in the U.S.
The Arialink acquisition, like AboveNet, has been made to increase Zayo’s fiber network: upon closing the $18 million cash deal, Zayo will have added 930 route miles nationally, 400 of which are in Lansing and Ann Arbor, MI. Arialink’s network is also connected to 437 buildings.
Zayo was initially formed to become an acquisition superpower – their mission was to purchase assets to roll into one large network, with the eventual goal of becoming an acquired company themselves. Now, the Zayo leadership team is transforming the company into something else altogether…an ATM perhaps? As Zayo continues to expand its massive network, the question has to be asked – would anyone be in a position to buy them, if this is still their long-term plan? And by adding Arialink’s assets and AboveNet’s dark fiber routes that span most major metro areas, will this change the dark fiber landscape? Share your thoughts in the comments below!