M&A Journal: AGL’s Metro Footprint Sold?

I have heard several rumors since the start of 2010 that AGL Networks has been looking for a suitor, all of which have come from reliable sources.  The latest, however, is that a buyer has stepped forth and we shall hear soon.  One source says that it is none other than Zayo that is doing the buying, which would not surprise me much at all – things have been far too quiet over there lately.  Of course, there are perhaps a half dozen metro fiber operators out there for whom AGL’s footprint might fit very well.  But metro fiber has in general been getting more respect lately, which means the price will only work if the business models fit.

AGL Networks has a a particularly extensive footprint of 420 route miles of fiber in Atlanta, 255 route miles out in Phoenix, and a recently added 92 route mile network in Charlotte.  They now have some 287 on-net buildings, which is up 16 since my last update to my on-net building statistics page.  They specialize in dark fiber and conduit only.  That means that their fiber also helps fill out lots of other metro footprints, at least in the Atlanta and Phoenix markets.  An acquirer therefore has to either like that dark fiber business or be willing to invest in lighting it on routes which probably have some competition due to those dark fiber sales.  Nevertheless, all three metro areas are attractive ones in terms of growing bandwidth needs.

If in fact Zayo is involved, the transaction would roughly parallel the company’s Denver transaction in which they acquired conduit through which many other providers already had fiber.  They have since pulled their own fiber and have begun bringing buildings on-net.  Zayo already has a bit of fiber in Phoenix that they acquired from CityNet, but Charlotte and Atlanta would be new territory for them.

If you haven't already, please take our Reader Survey! Just 3 questions to help us better understand who is reading Telecom Ramblings so we can serve you better!

Categories: Mergers and Acquisitions · Metro fiber