Zayo to acquire Allstream

Zayo Group Holdings, Inc, a provider of communications infrastructure services, has entered into a definitive agreement to acquire Allstream, Inc, which offers bandwidth and telecom services to business and public sector customers across Canada. Allstream is a wholly owned subsidiary of MTS, Inc, Canada’s fourth largest provider of telecommunications services. The purchase price is CAD$465 million, representing a pre-synergised adjusted EBITDA multiple of less than five times. Allstream has approximately CAD$600M revenue and adjusted EBITDA (excluding restructuring charges) of approximately CAD$100M.
Zayo is primarily interested in adding Allstream’s substantial fiber and colocation assets to Zayo’s 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 US 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.”