Zayo Group acquires Canadian firm Allstream for $348 million

BOULDER — Broadband infrastructure provider Zayo Group Holdings Inc. (NYSE: ZAYO) announced on Monday morning that it has reached a deal to acquire Canadian firm Allstream Inc. in an all-cash transaction worth roughly $348 million in U.S. currency.

Allstream is a subsidiary of MTS Inc. that provides bandwidth and telecom services across Canada.

The deal would give Boulder-based Zayo 9,000 kilometers of metro fiber that is concentrated in Canada’s five largest metropolitan markets. Allstream also has about 20,000 kilometers of long-haul fiber that connects all of the major Canadian metro markets and 10 U.S. network access points.

Zayo officials plan to split the Allstream business into three distinct segments, the largest being the company’s communication infrastructure portion, which will be dubbed Zayo Canada. That segment represents about half of Allstream’s revenue.

Voice and University Communications will be the second new segment for Allstream, while the third will be Small Business.

“Within today’s Allstream is a robust collection of fiber networks, which are enormously valuable to both Allstream and Zayo customers,” Zayo CEO Dan Caruso said in a press release. “We will unleash the full potential of these assets by combining them with Zayo’s network and focus on providing high-quality and low-cost bandwidth to help fuel the growth of Canada’s economy.”