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Another Acquisition in the ever shrinking CLEC Market October 19, 2011

Posted by TelUS Consulting Services in CLEC catagory.
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Zayo Group recently announced an agreement to acquire 360 networks holdings inc., a provider of fiber network and telecommunications services.

Louisville, Colo.-based Zayo said the acquisition of 360 networks will represent the largest of 17 acquisitions since the inception of the company four years ago.

Seattle-based 360 networks operates more than 18,500 route miles of intercity and metro fiber network across 22 states and British Columbia, and the company offers bandwidth infrastructure services to wireless and wireline carriers, cable providers, large enterprises and public sector customers.

The combination with 360networks marks a new chapter for Zayo, one in which Zayo may emerge as a national provider of Bandwidth Infrastructure service. “The acquisition nearly doubles the size of Zayo’s existing network,allowing them to provide a greater range of solutions, both in terms of markets served and ability to interconnect services across the markets.

Privately held Zayo Group expects the acquisition to close by early 2012 following customary approvals. Financial terms of the agreement were not disclosed.

Zayo Group is a provider of fiber-based bandwidth infrastructure and colocation and interconnection services. For the year ending June 30, 2011, Zayo Group posted revenues of $287.2 million and a net loss of $4.1 million. Investors in Zayo Group include Battery Ventures, Centennial Ventures, Charlesbank Capital Partners, Columbia Capital, M/C Venture Partners, Morgan Stanley Alternative Investment Partners and Oak Investment Partners.

And the market gets smaller. As I predicted several years ago, facilities based CLEC’s (those with fiber in the ground) are prime acquisition opportunities as the marketplace consolidates. Those CLEC’s without facilities may well get left to their own resources.

Joe Buck, NCE

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