Zayo completes Allstream acquisition, extending service automation, strategy into Canada

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Zayo Group has completed its acquisition of Canada's Allstream, enabling it to provide its differentiated strategy and service automation capabilities to the country's business customers.

Karl Maier, president of Zayo International, told FierceTelecom that the acquisition also gives Zayo the opportunity to duplicate the model it has in the United States for the Canadian telecom market.

"From a strategic perspective, I think Zayo has had very focused strategy in the U.S. for a number of years," Maier said. "The way I look at it is to buy robust, underutilized communications infrastructure assets and overlay and embed our very unique and differentiated model on top of that and sell proactively and use our scalable systems like Tranzact to make it easier for our customers to buy."

By completing the Allstream acquisition, Zayo establishes itself as a Pan-U.S./Canada fiber network provider, and adds five dense metro networks to its portfolio.

With the acquisition complete, Zayo will reorganize the Allstream business and assets into two business units: Zayo Canada and Allstream.

Zayo Canada will own and operate the Canadian fiber and data center assets and its products and customers will align with those of Zayo, a unit that will represent approximately half of Allstream's $413.37 million (CAD $600 million) revenue base.

Retaining the Allstream brand, the second business unit will include Allstream's voice, unified communications and small enterprise businesses.

The service provider has appointed Michael Strople, president of Allstream, to serve as managing director over both Canadian business units.

Strople will report to Karl Maier, president of Zayo International. The two executives will lead the initiative to restructure into two business units.

Similar to other acquisitions it has made in the U.S. and Europe, the key benefit to Zayo is the assets it gains.

By acquiring Allstream, it will add over 18,000 route miles to Zayo's fiber network, including 12,500 miles of long-haul fiber connecting all major Canadian markets and 5,500 route miles of metro fiber network connecting approximately 3,300 on-net buildings concentrated in Canada's top five metropolitan markets.

Maier said that the acquisition gives it an immediate foothold in Canada with a set of its own assets that it did not have before outside of some wholesale arrangements with carrier partners.

"We did not have much in Canada and it was basically type 2 solutions we were providing, but nothing owned by ourselves or on-net so this is a big, big move for us," Maier said.

For more:
- see the release

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