Late yesterday someone pointed me to a rumor that originated at CTFN and was bubbling through some alternative news sites, asking if there was any truth to it. The piece, which lasted all of two sentences, quoted sources saying that Lightower is exploring a sale and that Level 3 or Zayo would be likely buyers.
There are two sides to this. The first is that I haven’t heard anything specific about it at all, and that I doubt there is actual fire under the smoke this time. But the second is that I’d be completely amazed if it weren’t true to an extent.
Lightower is, after all, currently owned by private equity players (Berkshire, Pamlico, and ABRY) whose entire modus operandi is to buy, operate, or sell any given asset depending on which path makes them more money. Their timeframe tends not to be much longer than it has already been, and everyone that would be involved in such a transaction knows everyone else that would be at the table personally. If they weren’t having informal chats about the possibility on a regular basis, they wouldn’t be doing their jobs.
In fact, I’ve even seen the CEOs of all three companies (Lightower, Zayo, and Level 3) and a selection of representatives from private equity in the same building recently – specifically when I attended the Cowen Communications Infrastructure Summit last week out in Boulder. That’s home turf for Zayo and Level 3, but perhaps not so much for Lightower.
That being said, the question is not whether Lightower is exploring a sale, but whether anyone is close to meeting their owners’ price. It is likely to happen someday, but it’s just as likely at this point that Lightower could follow up its purchase of Fibertech with another acquisition in adjacent territority — Lumos Networks and FirstLight Fiber for instance, or even Electric Lightwave.
Both Level 3 and Zayo seem to be looking more in a European direction these days, where prices are lower and the targets more numerous. But that doesn’t mean they wouldn’t quickly pounce on Lightower’s northeastern fiber network if the price were finally right. And I can’t shake the feeling that the timing isn’t that wrong for such a deal.
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Categories: Fiber Networks · Mergers and Acquisitions
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Another data point to consider: Level 3 continues to suck at integrating acquired companies.
Hopefully it’s not Level 3… They did such a great job with the TW Telecom acquisition (sarcasm).
The Lightower assets would fill a gap in the Level 3 network though around Jersey, PA, upstate NY etc. I would hope this doesn’t happen, but I could see why Level 3 would want Lightower outside of just market share. I think Level 3’s next acquition will be European or hopefully something in APAC which is a real weak spot for them. Colt would fit the bill of course, more so since they acquired KVH.
Rumor is false. Lightower not for sale.
your statement is false. every company is always available for the right price.
Comcast have also submitted a bid and Google is following suit.
level 3 will buy zayo as there next move
Especially now that they’ve colluded to put one of their own in charge there.
This is a dumb comment. If Zayo wants to sell to Level 3, they have no reason to hire away one of their loyalists. These companies don’t need a back channel–they’re 10 miles down the road.
Gee whiz, internet comments–just say no.
To “I disagree” … remember the old saying – people buy from people. And people want to work with people they know and respect. I think both are true in why Jack went to Zayo and why i believe the door is potentially open for Level 3 to buy Zayo someday in the future. Relationships are critical and without them deals don’t get done.
I am not really surprised Jack Waters is working again with Dan Caruso b/c there was clearly mutual respect and trust to enable this to occur. I don’t know Dan C. personally but have heard from folks that have worked for him and really know him that he is a solid man and treats people well.
you’re kidding right
Lightower will be more acquisitive than anything else. I bet they take out a player like Electric Lightwave.
If Lighttower doesn’t find a buyer by 2017, they won’t be worth more than a Veggie Eggwhite Flatbread breakfast sandwich from Dunkin.
This is another stupid comment.
Guess Level3 wasn’t buying huh!?!?