Zayo expands in Europe with Viatel acquisition

Global bandwidth provider Zayo Group has agreed to acquire the infrastructure and non-Irish enterprise businesses of Dublin-based Viatel for approximately €95 million ($102 million).

Viatel is a wholly owned subsidiary of the Digiweb Group, a full service telecommunications and managed services operator.

“This transformative acquisition cements Zayo as a leading pan-European infrastructure provider and positions Zayo to capture significant organic and inorganic growth in Europe and beyond,” said Karl Maier, president of Zayo International.

The deal will provide Zayo with pan-European intercity and metro fibre capability via an 8,400km fibre network stretching across eight countries. The transaction will add 12 new metro networks, seven data centres and connectivity to 81 on-net buildings. Two wholly owned subsea cable systems will provide connectivity on two of Europe’s busiest routes – London-Amsterdam and London-Paris.

“Viatel’s long-haul fibre network and colo assets combined with Zayo’s existing national UK, France and US networks provides truly international, seamless connectivity for Zayo’s existing and new customers,” said Dan Caruso, chairman and CEO of Zayo. “Our pan-European infrastructure capability addresses new growth opportunities, including connectivity to key subsea cable systems delivering traffic to and from high-growth regions such as Asia and Africa.”

Zayo says the businesses to be acquired are extremely well aligned with the company’s existing product and customer set, including a high proportion of dark fibre revenue.

“The combination of Zayo and Viatel will provide far greater network reach and growth potential for Viatel’s customers,” added Colm Piercy, CEO of Viatel.

The all-cash transaction is expected to be funded with cash on hand and to close by the end of the calendar year, subject to customary closing conditions.

The news came on the same day that Zayo reported a net loss of $15.2 million for the latest quarter ended 30 September 2015, as well as organisational changes. From the next quarter, the company will report as four business units: dark fibre solutions, network connectivity services, colocation and cloud infrastructure, and ‘other’.

Viatel will continue to operate in Ireland, where it offers voice, data and hosting services.

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