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Zayo completes acquisition of Allstream from MTS

18 Jan 2016

US-based Zayo Group has closed its 100% acquisition of Canadian corporate and long-distance telecoms carrier Allstream from Manitoba Telecom Services (MTS) for CAD465 million (USD319.8 million). Zayo claims that the purchase establishes it as the only pan-US/Canada fibre network provider, while MTS stated that it will gain net proceeds of CAD420 million from the sale, which the Manitoban telco notes is CAD15 million more than under the terms of a previous aborted attempt to sell Allstream.

The acquisition adds more than 18,000 route miles to Zayo’s fibre network, including 12,500 miles of long-haul fibre connecting all major Canadian markets and 5,500 route miles of metro fibre network connecting approximately 3,300 on-net buildings concentrated in Canada’s top five metropolitan markets. Zayo’s ‘global Communications Infrastructure’ now encompasses 110,000 route miles of high-capacity fibre, 53 data centres and connectivity to approximately 350 markets across North America and Europe.

Zayo will reorganize the Allstream business and assets into two business units. The first, Zayo Canada, will own and operate the Canadian fibre and data centre assets and its products and customers will align with those of Zayo. Zayo Canada will represent approximately half of Allstream’s CAD600 million revenue base. The second business unit will include Allstream’s voice, unified communications and small enterprise businesses and will retain the Allstream brand.

In addition to high-capacity dark fibre, wavelength, Ethernet and other connectivity solutions, Zayo offers colocation and cloud services in its carrier-neutral data centres. Customers include wireless and wireline carriers, media and content companies and finance, healthcare and other large enterprises.

Canada, Bell MTS, Zayo Group, Zayo/Allstream (Canada)

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