zayo

An earlier version of this story misstated the price Zayo Group paid for Electric Lightwave. 

Continuing a wave of consolidation in the telecom industry, Zayo Group Holdings said Wednesday it had agreed to acquire smaller rival Electric Lightwave for $1.4 billion.

Both companies provide fiber, bandwidth and telecom infrastructure to enterprises. The deal will add Electric Lightwave’s 8,100 route miles of long haul fiber and 4,000 miles of dense metro fiber in the western U.S. to Zayo’s network.

“Electric Lightwave provides us another unique and dense regional fiber network that advances our position as the only national independent infrastructure provider remaining in the U.S.,” Zayo CEO Dan Caruso said in a news release.

“Electric Lightwave has both strong metro fiber assets in key West Coast markets and capacity and routes that will augment Zayo’s intercity footprint,” he added.

Zayo expects more than $40 million in annual cost synergies to be realized throughout the integration process.

As Reuters reports, the telecom industry has been consolidating as U.S. businesses’ burgeoning demand for data and video fuels a revival in fiber optic services. In other recent deals, CenturyLink agreed to buy Level 3 Communications for $24 billion and Windstream Holdings said it would buy acquire EarthLink for $1.1 billion.

According to The Oregonian, Vancouver, Wash.-based Electric Lightwave spent more than $1 billion to build its fiber network across the western U.S., then nearly collapsed in the dot-com bust. It was acquired by Integra Telecom in 2006.

Earlier this year, Integra changed its name to Electric Lightwave to reflect its increased focus on the fiber business. The company provides on-net connectivity to more than 3,100 enterprise buildings and 100 data centers.

Zayo said approximately 40% of Electric Lightwave’s revenue aligns with Zayo’s infrastructure-focused business segments and will be rapidly integrated into the core Zayo organization, processes and systems. The remainder aligns with Zayo’s Canadian small to medium enterprise and voice businesses.

This year, Boulder, Colo-based Zayo has expanded through acquisitions into Silicon Valley, Chicago and several cities in Texas.

“Zayo has a proven track record of integrating key fiber infrastructure assets while also maximizing the value of more traditional telecom business units,” Caruso said.

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