US-based provider of communications Infrastructure services, Zayo, has closed its €98.8 million acquisition of Viatel ‘s infrastructure and non-Irish carrier and high bandwidth business from Irish Digiweb Group.
The acquisition adds an 8,400 kilometre fibre network across eight countries to Zayo’s European footprint, including 12 new metro networks, seven data centres and connectivity to 81 on-net buildings.
Zayo needs the Viatel acquisition to expand its network and to speed up its slowing financial fortunes. Last quarter (ending Sept 30th 2015) Zayo Group generated quarterly revenue of $366.8 million up $4.9 million with a net loss $15.2 million, which was $20.3 million lower than the prior quarters net income of $5.1 million. Will there be more? Probably, the acquisition represents a small chunk of the $785 million of cash and revolving credit facility they have available so there’s at least another $680 million left to spend on further acquisitions.
The new capability significantly expands Zayo’s global capabilities, providing Pan-European infrastructure and connectivity to two subsea cable systems between London and Paris and London and Amsterdam, delivering traffic to and from North America, Asia and Africa.
Commenting on the deal Dan Caruso, Zayo chairman and CEO said. “The acquisition of Viatel’s European network business strengthens our strategic position in Europe and provides customers with access to our fibre network and expanded connectivity to key international markets.”