Contact: Scott Denne Michael Levy
Two acquisitions announced today – Time Warner Cable’s $600m cash purchase of DukeNet Communications and Zayo Group’s pickup of FiberLink – put 2013 on pace to be the most-active year for fiber-optic network deals by volume. There have been 10 transactions in North America so far this year, which already matches the two highest-volume years on record.
After a lull in fiber optics M&A after the dot-com bubble, each of the last three years have logged at least eight acquisitions in this market. The uptick comes from telcos’ desire for more fiber connections to datacenters, colocation facilities and cellular networks as consumer traffic, such as streaming video, is making up a larger and growing portion of the Internet.
Despite the rise in activity this year, the total amount spent on such deals – $912m so far in 2013 – is down from last year when $2.21bn had been spent by this point, with almost all of it coming from Zayo’s $2.2bn purchase of AboveNet. The difference in price reflects that most of the largest assets in the North American fiber market have already been scooped up, with only regional providers like Cross River Fiber and Fibertech Networks remaining. For that reason, we don’t expect too many more large transactions in this space and anticipate the overall pace of deals to begin ticking downward.
Fiber-optic network acquisitions
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Source: The 451 M&A KnowledgeBase
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