Zayo acquires 360networks

Top M&As 2011Deal size: $319 million

Why it's relevant? With its $319 million acquisition of 360networks, Zayo instantly increases its fiber and service footprint with more than 44,000 route miles and nearly two million fiber miles.

In making this purchase, Zayo added 360networks' 18,500 route miles of metro and intercity fiber to its network, which interconnects 73 markets across central and western United States, including 24 of its existing fiber markets. The service provider also gains access to a number of markets it had not previously served, including Albuquerque, Bismarck, Des Moines, San Diego, San Francisco and Tucson.

With an increased focus on providing both dark and lit fiber, 360networks' wholesale VoIP business will become part of Onvoy Voice Services, which Zayo Group previously spun off as a separate entity.

It has been a busy year for mergers and acquisitions in the competitive telecom service provider space with a number of CLECs either buying or being bought out by larger competitors. Over the course of its four year existence Zayo itself has acquired over 17 companies to build a sizeable wholesale and business service network.

What's also significant about this deal is that it gives Zayo greater capabilities on the West Coast in addition to a number of smaller Tier 2-3 markets. These markets continue to present two emerging opportunities for competitive providers: data center connectivity and wireless backhaul.

With many data centers being located outside of large markets, Zayo can provide necessary fiber-based connectivity to and between data center sites. Likewise, it can jump into the fiber-based wireless backhaul gold rush where a slew of competitive and smaller independent telcos are providing services to large Tier 1 wireless operators like AT&T (NYSE: T) and Verizon (NYSE: VZ) outside of their respective wireline network footprints.

Zayo acquires 360networks