Zayo Group is deepening its presence in the Baltimore-Washington metropolitan area by acquiring Litecast, a competitive fiber and Ethernet service provider, for $22 million.
Like other acquisitions Zayo has made this year, including its recent deal to buy First Telecom, the focus again is on enhancing the company's dark fiber and Ethernet services reach.
By acquiring Litecast, Zayo will immediately get access to an additional 110 on-net buildings, including all of the city's major data centers and carrier hotel facilities. The acquisition will also bolster Zayo's presence in serving the local health care and education market segments with a mix of Ethernet and dark fiber services.
This acquisition will build on the network facilities Zayo gained via its acquisitions of both AboveNet and FiberGate in the Washington, D.C., and Northern Virginia area. When it acquired FiberGate, for example, a deal it announced in June, Zayo gained an additional 399 new route miles and 130,000 fiber miles.
Having an expanded set of buildings and fiber miles makes Zayo a more competitive threat to both traditional ILECs such as Verizon (NYSE: VZ) and competitive fiber providers like Level 3 Communications (NYSE: LVLT) to target the ever-changing government sector that's always looking to contain costs and find high bandwidth solutions.
For existing Litecast customers, especially those who have multiple locations both in Washington-Baltimore and in other markets, Zayo can potentially upsell those customers with connectivity in other markets. Zayo can also offer its fiber-based services to other service providers, including wireless operators.
Dan Caruso, president and CEO of Zayo Group, said in a release that "The acquisition completes a very compelling set of fiber assets in the increasingly important Baltimore-Washington metropolitan market."
Existing customers will also be able to get access to Zayo's newly launched 100G optical wavelength services. While Zayo did not announce any specific locations, it's likely Baltimore-Washington will be one of the major markets that will be able to take advantage of the service.
Given the concentration of Baltimore customers and product set and size, Zayo said it expects the integration process to be completed quickly and maintain a strong local presence.
The service provider expects to complete the acquisition, funded with cash on hand, after it gets customary regulatory approvals by the end of the year.
- see the release
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