Zayo to acquire neutral path
Wednesday, Jan 31, 2018
Zayo Group Holdings, Inc. (NYSE: ZAYO) today announced that it has entered into an agreement to acquire substantially all of the assets of Neutral Path Communications and Near North Partners for $31.5 million. Neutral Path is a long haul infrastructure provider, operating a fiber network in the Midwest.

The transaction will add 452 owned plus additional leased route miles to Zayo’s extensive North American network, including a unique, high-count fiber route from Minneapolis to Omaha. The assets are highly complementary to Zayo’s Midwestern long haul dark fiber footprint.

As a result, Zayo will be able to sell multi-city dark fiber and fiber-based lit solutions from Minneapolis into Omaha, extending to Denver, Kansas City, Tulsa, Dallas, Des Moines, Chicago and other major markets. The network was architected to provide convenient options for carrier backhaul (both wireline and wireless) from the cities along the route to further enable broadband expansion in this area of the country.

“This is another example of executing on our ‘tuck-in’ strategy, acquiring companies that add strategic assets that we can leverage immediately,” said Jack Waters, CTO and president of Fiber Solutions at Zayo. “Based on expressed customer demand, we’re confident we will quickly be able to pursue the robust funnel of sales opportunities and grow the revenue base on these assets.”

Neutral Path is expected to generate $2.1M in annualized EBITDA for the quarter ended March 31, 2018. Zayo expects to achieve approximately $0.6M in annualized cost synergies within four quarters of the acquisition closing date.

The transaction is expected to close in the second calendar quarter of 2018, subject to regulatory approvals and customary closing conditions. The purchase price is subject to net working capital and other customary adjustments, as well as a contingent payment based on sales performance through June 30, 2018. 

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