Showing posts with label Allstream. Show all posts
Showing posts with label Allstream. Show all posts

Monday, November 23, 2015

Zayo to Acquire Allstream for its Canadian Network

Zayo Group Holdings agreed to acquire Allstream,a wholly owned subsidiary of MTS, for CAD $465 million, representing a pre-synergized adjusted EBITDA multiple of less than five times. Allstream has approximately CAD $600M revenue and Adjusted EBITDA (excluding restructuring charges) of approximately CAD $100M.

Allstream is a Canadian leader in IP communications and the only national provider that works exclusively with business customers.  Zayo said the acquisition will add substantial fiber and colocation assets across Canada to its own core network Communications Infrastructure business. Allstream has over 9,000 route kilometers of metro fiber network concentrated in Canada’s top five metropolitan markets, (Toronto, Montreal, Vancouver, Ottawa, and Calgary) that connect to approximately 3,300 on-net buildings. In addition, Allstream has an approximate 20,000 route kilometer long-haul fiber network connecting all major Canadian markets and 10 U.S. network access points. In addition, Allstream operates colocation space in Toronto, Montreal, and Vancouver.

“Within today’s Allstream is a robust collection of fiber networks, which are enormously valuable to both Allstream and Zayo customers,” explained Dan Caruso, chairman and CEO of Zayo. “We will unleash the full potential of these assets by combining them with Zayo’s network and focus on providing high-quality and low-cost bandwidth to help fuel the growth of Canada’s economy.”

Zayo estimates that approximately half of Allstream’s revenue is a direct fit with Zayo’s existing core business. Zayo’s investment thesis is to separate this business from other parts of Allstream, and integrate it into Zayo, using the same approach as is currently in place for Zayo UK and Zayo France. This plan includes retaining a strong Canadian brand and presence. The segmentation of the Communication Infrastructure portion of Allstream’s business (“Zayo Canada”) and follow-on reporting into Zayo’s core business segments (Dark Fiber Solutions, Colocation & Cloud Infrastructure, and Network Connectivity) will take multiple quarters to complete.

“As we stand up Zayo Canada, we are targeting CAD $300M of revenue, a >40 percent EBITDA margin, and a high single digit growth rate,” said Karl Maier, president of Zayo International. “If we achieve this outcome and apply an EBITDA multiple similar to Zayo, the value of Zayo Canada will be substantial.”

The other half of Allstream’s business will be organized into two additional segments: Voice and Universal Communications (approximately one third of Allstream’s revenue), and Small Business (primarily enterprise voice). Each of these will be separated into standalone business units in parallel with the formation of Zayo Canada.

MTS is Manitoba’s leading communications company and is wholly owned by Manitoba Telecom Services Inc. (TSX: MBT).

http://www.allstream.com
http://www.mts.ca
http://www.zayo.com

Friday, May 24, 2013

MTS to Sell Allstream for C$520 Million to Naguib Sawiris

Manitoba Telecom Services (MTS) agreed to sell its Allstream division to Accelero Capital Holdings , an investment and management group, for $520 million, subject to certain customary adjustments.  The deal is expected to close in the second half of 2013, subject to receipt of Investment Canada approval and customary closing conditions.

Allstream provides enterprise communications services acress Canada and counts more than 65,000 businesses - large, mid-sized, and small - among its national customer base.  Allstream operates an IP network spanning 30,000 route kms across Canada, including 18,000 route kms of inter-city fiber and 8 cross border connections to the U.S.

Accelero is an investment and management group focused on telecommunication, digital media and technology. Accelero is controlled by Egyptian billionaire Naguib Sawiris, Non-Executive Chairman and Co-Founder, is a renowned telecom entrepreneur.

"This transaction is the successful culmination of a diligent process to determine the best way to create shareholder value and drive strong, competitive and sustainable futures for both MTS and Allstream," said David Leith, Chair of the Board of Directors. "We believe this transaction represents attractive value for Allstream, is in the best interests of the Company, its customers, employees and business partners, and that it will increase the level of investment and competition in Manitoba and across the Canadian business market."

Pierre Blouin, Chief Executive Officer, said, "This transaction makes MTS a stronger, more focused and more valuable company. MTS goes forward as a pure-play telecom with a strong consumer franchise and significant free cash flow to support our dividend. We will also have sufficient capital to invest in wireless spectrum and to continue bringing fibre-to-the-home, 4G LTE wireless technology and other products and services to more communities across Manitoba, further solidifying our position as the undisputed market leader in the province."


http://www.mts.ca/
http://www.allstream.com/