Zayo to acquire First Telecom Services

18 October 2012 | Kavit Majithia


Zayo has reached an agreement to acquire First Telecom Services (FTS) for $110 million.

The deal is seen to widely complement Zayo’s existing services in numerous markets and will increase the company’s portfolio of wholesale services.

FTS is a regional service provider, serving business customers in north eastern and mid-western parts of the US, and the acquisition will give Zayo an additional 8,000-route miles and 500 on-net buildings.

The deal further gives Zayo ownership of fibre routes which operate on a long-term indefeasible rights of usage (IRU) agreement.

FTS has largely built its recent success as a wholesale provider and delivers services to other carriers across 11 states in the US.

The company has been substantially growing its portfolio of business services, including MPLS and Ethernet through its Business Services Group.

Its network revenue largely comes from Pennsylvania and Ohio, areas which Zayo has been offering services in for numerous years, and ownership of the fibre assets is as an additional plus for the company.

“This transaction strengthens Zayo’s business both from a revenue and asset perspective,” says Dan Caruso, president and CEO of Zayo. “First and foremost, FTS brings a strong and durable base of largely dark fibre revenue from a select group of strategic customers. Second, it secures Zayo’s control over some critical and unique regional fibre routes.”

Zayo expects the deal to close by the end of the year.